Tata Technologies Ltd vs Commissioner Of Central Excise, Pune

(Arising out of Order-in-Appeal No. PI/RKS/168/2010 dated 30/09/2010 passed by A. Commissioner of Central Excise (Appeals), Pune-1.)

For approval and signature:

Honble Mr. M.V. Ravindran, Member (Judicial) and Honble Mr. C.J. Mathew, Member (Technical)

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1. Whether Press Reporters may be allowed to see : No 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 : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

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

4. Whether Order is to be circulated to the Departmental : Yes authorities?

====================================================== Tata Technologies Ltd. Appellant Vs. Commissioner of Central Excise, Pune 1 Respondent

Appearance: Shri Vinay Jain, CA for Appellant Shri A.B. Kulgod, Additional Commissioner (AR), for Respondent

CORAM: Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical)

Date of Hearing : 26/08/2015 Date of Decision : 26/08/2015

ORDER NO

Per: M.V. Ravindran

This appeal is directed against Order-in-Appeal No. PI/RKS/168/2010 dated 30/09/2010.

2. Briefly stated the facts of the case are that M/s Tata Technologies Ltd. (hereinafter referred to as the appellants) are holders of Service Tax Registration No. AAACT3092NST001 and engaged in providing various services such as the Information and Database Access or Retrieval Services, Business Auxiliary Services and Consulting Engineer Services. During the course of audit it was observed that the appellants have provided CAD/CAM/CAE engineering and designing services to their sister concern M/s Tata Johnson Controls Automotive Ltd. But did not pay the tax liability on the said services by claiming exemption under Notfn. No. 21/2003-ST dated 20-11-2003. The Notfn No. 21/2003-ST dated 20-11-2003 exempts taxable services from the whole of the tax livable thereon same is not repatriated/ sent outside India/ However, in the instant case the appellants have received all the payment in India. However, in the instant case the appellants have received all the payment in Indian currency. Therefore, the conditions of Notification No. 21/2003-ST dated 20-11-2003 are not satisfied and the exemption is not available to the appellants.

3. Show cause notice was issued for the demand of service tax liability, interest thereof and for imposition of penalties. Show cause notice was contested on merits as well as on limitation. The adjudicating authority did not agree with the condition raised and confirmed the demand with interest also imposed penalties, an appeal against such an order was also rejected by the first appellate authority.

4. Learned counsel would submit that the demand of the service tax is for the period from 20-11-2003 to 2-3-2006 and the show cause notice is issued of 30th March 2009. It is his submission that the appellant had provided secondary services to M/s Tata Johnson who utilizes the services for rendering the services to customers situated abroad and in term of Export of Services. He would submit that the Central Board of Excise and Customs vide circular No. 56/5/2003-ST dated 25-04-2003 had clarified that services rendered by Secondary service provider if ultimately consumed, which merges, with the services that are being exported, no service tax is leviable. He would rely upon the circular heavily.

5. Learned departmental representative would submit that there is nothing on record to indicate that the services rendered by the appellant to Tata Johnson Ltd. was consumed for the export of the services rendered by Tata Johnson. It is his further submission that the board circular relied upon by the appellant is not applicable at all in the absence of any evidence that all the services are rendered and consumed by Tata Johnson were utilized for export of services.

6. We considered the submission made at length by both sides and perused the records.

7. On perusal of records, it transpires that the issue involved in the case is regarding the demand of service tax liability for the services rendered to Tata Johnson Ltd., Who had consumed the said services for the export of services.

8. On perusal of the records we find that the appellant had produced document related to the order for development of software by the appellant and supplied to Tata Johnson Ltd. On deeper perusal of the specific work order we find that the said work order was in respect of development i.e. in respect of the work undertaken for the services to be rendered by Tata Johnson Ltd. to other overseas customers. We also find that it is not dispute that the appellant had provided services to Tata Johnson who are 100%E.O.U. That Tata Johnson was a 100% E.O.U. is not disputed and is recorded in the adjudication order as well as in impugned order. If it is so, inference that could be drawn is, services rendered by the appellant to Tata Johnson would be qualified for as our Export of Services. Honble High Court of Bombay in the case of Repro India Ltd. Vs UOI 2009 (235) ELT 614 (Bom.) has clearly settled the law, in as much that only goods and services are to be exported and not the taxes.

9. In a similar issue, this bench in the case of SGS India Pvt. Ltd.  2011 (24) STR 60 had held that the services rendered by the appellant therein for inspection of goods for export are covered as export of services. This view of the tribunal we upheld by the Honble High Court of Bombay, on an appeal filed by the revenue, as reported at CST 2014 (34) STR 554 (Bom.).

10. In our view, the issue is no more res-Integra. Accordingly in the facts and circumstances of this case and authoritative judicial pronouncement, we hold that impugned order is unsustainable and liable to be set aside and we do so. The impugned order set aside and appeal is allowed.

(Pronounced in Court)

(C.J. Mathew) Member (Technical) (M.V. Ravindran) Member (Judicial)

akp 1 4 APPEAL No.ST/753/10-Mum