Nuware Systems Pvt. Ltd vs Commissioner Of Service Tax Bangalore

[Arising out of Orders-in-Appeal No. 84  86/2011 dated 04/02/2011 passed by the Commissioner of Central Excise, Bangalore]

For approval and signature:

HON'BLE Mr. 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? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 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

Nuware Systems Pvt. Ltd. No.60, 1st Cross, HAL 3rd Stage, Bangalore - 560 075 Appellant(s)

Versus Commissioner of Service Tax Bangalore 1st To 5th Floor, TTMC Building, Above BMTC Bus Stand, Domlur Bangalore - 560 071 Karnataka Respondent(s)

Appearance:

Mr. Prateek Merlacha, CA MSSV & Co.

63/2, 2nd Floor, (Above Canara Bank) Railway Parallel Road, Kumara Park West, Bangalore  560 020 Karnataka For the Appellant

Mr. N. Jagdish, AR For the Respondent

Date of Hearing: 17/03/2015 Date of Decision: 17/03/2015 CORAM:

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

Final Order Nos. 20771-20773 / 2015

Per : B.S.V. MURTHY

The appellant is a 100% EOU and is engaged in rendering Information Technology Software Service exports. All the services have been exported to their parent-company Nuware Technology Corporation, U.S.A. There is no dispute about the export of service. After completion of exports, since the appellants could not utilize the cenvat credit on input services, they applied for refund of accumulated cenvat credit under Notification No. 5/2006  CE (NT) read with Rule 5 of Cenvat Credit Rules 2004 for three quarters from January 2009 to March 2010. The original adjudicating authority rejected the refund claim partially and on the appeal filed by the appellants, even though in the findings portion during the discussions, the learned Commissioner took the view that in respect of certain services the appellant is eligible and in respect of certain services it has to be examined whether the employees remuneration included these costs, yet in the order portion rejected the appeals. The learned CA submitted that they had filed a rectification application but reply was given saying that the findings were not followed with the order because refund claims have been rejected on the ground of lack of evidence also. He submits that this observation may be applicable only in respect of one service.

2. I agree with the submission that there is a contradiction between the findings and the order-in-original. The learned CA also submitted that they had cited some decisions to support their claim that the input services had nexus with the output services but both the lower authorities have not discussed these decisions. Subsequent to these decisions there have been several decisions of the High Courts. Further this Tribunal also in the case of Apotex Research Pvt. Ltd. had considered the issue of nexus and broad guidelines were laid down and some of the decisions cited were also noted. It is felt that now the issue is fully settled. Therefore in my opinion it would be appropriate to remand the matters to the original refund sanctioning authority so that he can consider the issue of nexus afresh in respect of services which were not considered as input services on the ground that there is no nexus and decide the amount of refund admissible afresh. The learned AR would submit that in one case documents were not produced. Since the matter is being remanded all the services can be considered afresh. It is made clear that in respect of services for which cenvat credit refund has already been allowed by the original refund sanctioning authority/Commissioner will not be disturbed again in de novo proceedings. Appellant shall be given reasonable opportunity to present their case before passing the Final Order. Since the refund claims relate to the year 2008, the original authority is requested to ensure that the proceedings are completed expeditiously and not later than three months subject to the condition that appellants make detailed written submissions within 15 days. Appellant shall also produce the copy of this order so that the original authority can refer to the same and take up adjudication of issue afresh.

(Order pronounced and dictated in open court)

(B.S.V. MURTHY) TECHNICAL MEMBER

iss