Dst Wordwide Services India Pvt Ltd vs Commissioner Of Central Excise, ...

[Arising out of Order-in-Appeal No. 32-2011 dated 28/04/2011 passed by CCE(Appeals-II), Hyderabad]

[Arising out of Order-in-Appeal No. 33-2011 dated 28/04/2011 passed by CCE(Appeals-II), Hyderabad]

For approval and signature:

HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

DST WORDWIDE SERVICES INDIA PVT LTD 2ND AND 3RD FLOOR, 6-3-879 & 879/B, G PULLA REDDY BUILDINGS GREENLANDS, BEGUMPET HYDERABAD 500 016 Appellant(s)

Versus

Commissioner of Central Excise, Customs and Service Tax HYDERABAD-II NULL L.B STADIUM ROAD, BASHEERBAGH, HYDERABAD, - 500004 ANDHRA PRADESH Respondent(s)

Appearance:

Shri L.S. Karthikeyan, Advocate V. LAKSHMIKUMARAN & V. SRIDHARAN WORLD TRADE CENTRE NO.404-406, 4TH FLOOR, SOUTH WING BRIGADE GATEWAY CAMPUS NO.26/1, DR. RAJKUMAR ROAD, MALLESWARAM . BANGALORE - 560 055 KARNATAKA For the Appellant

Shri S. Ilangovan, Asst. Commissioner(AR) For the Respondent

Date of Hearing: 16/04/2015

Date of Decision: 16/04/2015

CORAM:

HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER

Final Order No. 21123-21124 / 2015

Per : B.S.V.MURTHY

Appellant is a 100% EOU registered under STPI scheme. They registered for providing Information Technology Software Service(ITSS), Business Auxiliary Service(BAS) and Business Support Services(BSS). The services are exported to DST Worldwide Services, LLC, USA in terms of a service agreement and to DST Global Solutions Group Services Ltd. in terms of another service agreement. Portion of two refund claims filed by the appellants for the period from October 2009 to March 2010 have been rejected by the Revenue and hence the appeals. The claims have been rejected on the ground that there is no nexus between the input and output services and refund of unutilized credit has to be restricted to the proportion of export turnover to the total turnover.

2. The first submission made by the learned counsel was that the rejection of value pertaining to maintenance and service imported by the appellant for calculating the total turnover is not correct. It was submitted that appellant had not claimed the credit refund of tax paid on management, maintenance and repair service received by them under reverse charge mechanism. The total turnover of the appellant during the material period was Rs.19,40,31,076/- and they did not have any domestic turnover. Therefore the appellants total turnover should have been taken as equal to the export turnover and they had declared only this turnover. Inclusion of amount of service consideration in respect of service received involved for calculating the total turnover is not correct. I find myself in agreement with this submission. The service received is deemed to be output service but it cannot be considered as turnover. The deeming fiction is only for the purpose of account of service tax in the capacity of receiver and it cannot be taken as their turnover. The appellants relied upon the Boards letter F.No.B1/4/2006-TRU dt. 19/04/2006. In that reference, it was stated that all legal fiction is created to collect tax from the receiver. He also relied upon Rule 5 of the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006. This rule reads as under:

5. The taxable services provided from outside India and received in India shall not be treated as output services for the purpose of availing credit of duty of excise paid on any input or service tax paid on any input services under CENVAT Credit Rules, 2004.

The bar imposed for availing credit would clearly show that the treatment of the service received as output service is only for the purpose of payment of service tax by the receiver and no other purpose. In view of the above, I find that the submissions by the appellants relating to calculation of turnover for the purpose of calculating admissible refund are correct.

3. As regards nexus in respect of different services, the learned counsel relied upon several decisions to submit that appellant is eligible. Since the matter has to be remanded in any case to the original authority, the Tribunal need not deal with the same but to leave it to the original authority. I find this submission appropriate.

4. In view of the above discussion, the impugned orders are set aside and the matters are remanded to the original adjudicating authority with a direction to determine the refund by calculating the turnover as per the submissions of the appellant before me and determine the nexus between the input and output services in accordance with the decisions cited before me as well as the Interim Order No.79-152 dt. 29/08/2014 in the case of Apotex Research Pvt. Ltd. & others Vs. CCE.

(Operative part of this order pronounced in open court)

B.S.V.MURTHY TECHNICAL MEMBER Raja.

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