Textron India Pvt Ltd vs Commissioner Of Service Tax ...

[Arising out of Order-in-Appeal No. 209-2011 dated 21/03/2011 passed by CCE(Appeals-II) Bangalore]

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?

TEXTRON INDIA PVT LTD GLOBAL VILLAGE, RVCE POST MYLASANDRA, OFF MYSORE ROAD, BANGALORE 560 059 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 Shailendra Sukhlecha, CA For the Appellant

Shri A.K. Nigam, Addl. Commissioner(AR) For the Respondent

Date of Hearing: 19/03/2015

Date of Decision: 19/03/2015

CORAM:

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

Final Order No. 20794 / 2015

Per : B.S.V. MURTHY

The issue involved is whether the appellant is eligible for the rebate of service tax paid at the time of export of their services under Notification No.11/2005-ST. Out of Rs.20,15,886/- claimed by the appellant for March 2008, an amount of Rs.17,28,804/- has been rejected on the ground that there is no nexus between the input services and the exported output service.

2. The learned CA on behalf of the appellant submits that the appellant was claiming only rebate of service tax paid on the output service and this was not a claim of rebate of the taxes paid on input services which is dealt with in Notification No.12/2005. He submits that the show-cause notice did not propose this action and therefore the decision is beyond the show-cause notice. He also relies upon the paragraph 4.4 of a subsequent order passed by the very same Commissioner(Appeals) on the very same issue in respect of the very same appellant and submits that the Commissioner(Appeals) for the subsequent period has held that whether there was nexus between the input services and the output service is not relevant.

3. Learned AR on the other hand would submit that the show-cause notice had required the appellants to show the description, nature and the percentage of usage of each input services for export of service and this according to the notice was not produced. Therefore it cannot be said that the authorities have travelled beyond the show-cause notice. Further he also draws my attention to paragraph 6 of the show-cause notice which says This show cause notice issued without prejudice to any other action that can be taken against the claimant or any other person concerned with the acts, commissions as mentioned in this notice or under any other law for the time being in force in India. He also submits that the appellants have not filed the copy of the rebate claim along with appeal memo and therefore the matter may be adjourned so that the copy of the rebate claim can be filed.

4. I have considered the submissions made by both the sides. As regards the first submission by the learned AR that the show-cause notice required the appellant to produce the nature of input services, its usage etc., I have to observe that while considering the rebate claim for output service, the nexus issue cannot be raised. The only thing that can be considered is whether the tax has been paid or not. The proper course of action would have been to propose to denial of the CENVAT credit which has been used for payment of service tax on the output service on the ground that there is no nexus. There is no clear proposition or proposal for this in the show-cause notice. In the absence of a clear proposal, the ground of nexus to reject the rebate claim of tax paid on output service, in my opinion, could not have been used. Further as submitted by the learned CA, in the order passed by the very same Commissioner(Appeals) after one year in respect of the very same appellant, he has taken a clear stand that on the ground of nexus, rebate claim could not have been rejected. Paragraph 4.4 of the OIA No.118/2012 dt. 24/05/2012 is relevant and is reproduced below:-

4.4. This view of the original authority cannot be accepted. The question of eligibility of credit cannot be raised in this manner. There are separate procedures for dealing with such an issue. The matter before him is that of rebate, once the claimant has demonstrated that there is sufficient credit lying in balance in his account and has paid tax on services exported by utilizing such credit he should be entitled to rebate of the same provided he has satisfied the conditions and other requirements of Notification 11/05-ST. In the instant case the original authority is satisfied with the exports made and the receipt of the payments made in convertible foreign currency.

Therefore I do not consider it appropriate that the rebate claim could have been rejected. In view of the above, the appeal is allowed with consequential relief, if any, to the appellant.

5. As regards non-submission of copy of rebate claim, since the issue is rebate claim and has nothing to do with the verification of documents or the rebate claim per se, the non-submission of the copy of the rebate claim is not relevant and therefore that objection is rejected.

(Order pronounced and dictated in open court)

B.S.V.MURTHY TECHNICAL MEMBER

Raja.

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