Manhattan Associates (India) ... vs Commissioner Of Service Tax ...

[Arising out of Order-in-Appeal No. 363-2011 dated 28/07/2011 passed by CCE(Appeals-II), Bangalore]

For approval and signature:

HON'BLE SHRI ASHOK KUMAR ARYA, 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? No 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? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes

MANHATTAN ASSOCIATES (INDIA) DEVELOPMENT CENTRE PVT LTD 172, EPIP ZONE PHASE II, WHITEFIELD ROAD, BANGALORE 560 066 Appellant(s)

Versus

Commissioner of Service Tax BANGALORE-SERVICE TAX NULL 1ST TO 5TH FLOOR, TTMC BUILDING,above BMTC BUS STAND,DOMLUR BANGALORE, - 560071 KARNATAKA Respondent(s)

Appearance:

Shri Siddarth Garg, CA For the Appellant

Shri Pakshi Rajan, Asst. Commissioner(AR) For the Respondent

Date of Hearing: 12/08/2015

Date of Decision: 12/08/2015

CORAM:

HON'BLE SHRI ASHOK KUMAR ARYA, TECHNICAL MEMBER

Final Order No. 21792 / 2015

Per : ASHOK KUMAR ARYA

Both the appellant and the respondent have been heard represented by learned CA Shri Siddarth Garg and learned AR Shri Pakshi Rajan, respectively. The issue here is rejection of refund of the accumulated CENVAT credit for various input services claimed to have been utilised for export for the period of July 2008 to September 2008.

2. The learned CA representing the appellant has given a list of 17 services mentioning the amount involved along with the names of the case law applicable for the respected service in its favour. In case of the service viz. Banking and Other Financial Services and the Design Services mentioned at Sl.No.2 and 8 of this list, no case law has been mentioned and the amount involved herein has been shown as Rs.19/- and Rs.4,302/-respectively. In case of above two services, the learned CA withdrew his claim for refund saying that he is not sure how these services are exactly having nexus with the export of their output service(s).

3. The other services which have been mentioned by the appellant for which they are claiming the refund as they paid service tax for the input services for the export of output service are named below.

i. Air travel ix. Management or Business Consultancy Services ii. Chartered Accountants service x. Management, Maintenance or Repair Service iii. Clearing and Forwarding Services xi. Manpower Recruitment and Supply Agency iv. Commercial Training and Coaching Services xii. Outdoor Catering Service v. Company Secretary Services xiii. Rent a Cab Service vi. Courier Service xiv. Rent paid on car parking, cafeteria and terrace of the building vii. Event Management Services xv. Security viii. Insurance Service

I find that some of these input services have been excluded post 01/04/2011 from the definition of input service given in Rule 2(l) of CENVAT Credit Rules 2004. However the period involved here is prior to 01/04/2011, that is why this exclusion will not be applicable to the appellants case.

4. I find that Order-in-Original passed by Asst. Commissioner has been upheld by the Commissiioner(Appeals-II), Bangalore. In the Order-in-Original, the adjudicating authority says that nexus is not proved in case of the input services mentioned in the para 8 of his order.

5. Firstly let us refer to the relevant portion of the definition of Input Service given under Rule 2(l) of CENVAT Credit Rules 2004. Rule 2(l) interalia says as follows:-

(l) "input service" means any service,-

(i) used by a provider of taxable service for providing an output service; or

(ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal;  .

This rule in sub-clause (ii) clearly says that the input service which are used directly or indirectly, in or in relation to the final products and clearance of final products upto the place of removal of the manufacturer / service provider would be covered within the definition of Input Service. This Rule 2(l) has given inclusions where services used in relation to the modernization, renovation or repairs of a factory, premises of provider of ouput service or an office relating to such factory or premises, advertisement or sales promotion, market research and so on.

6. Here reference can be made to CESTAT, Ahmedabads decision in the case of Ultratech Cement Ltd. Vs. CCE, Bhavnagar [2011(22) STR 578 (Tri. Ahmd.)], which has quoted Honble Supreme Courts decision in the case of Maruti Suzuki Ltd. Vs. Commissioner [2009(240) ELT 641 (SC)] and Honble Bombay High Courts decision in the case of Coca Cola India Pvt. Ltd. Vs. Commissioner [2009(15) STR 657 (Bom.)] saying that input services / activities in relation to business can cover all activities / services relating to functioning of the business and the expression of business is wide  . Consequently I am of the considered view that the definition of input service is wide and the input services in question (the appellant here has not pleaded relief in respect of Banking and Other Financial Service & Design Service) would be covered for relief i.e. refund of accumulated input service credit in terms of Rule 5 of CENVAT Credit Rules, 2004 to the appellant.

7. Consequently the appeal is partially allowed with the consequential benefit to the appellants in terms of above discussion and order.

(Order pronounced and dictated in open court)

ASHOK K. ARYA TECHNICAL MEMBER

Raja.

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