The Chandigarh Bench of Customs, Excise and Service Tax Appellate Tribunal has directed re-adjudication holding that refund of Cenvat credit of service tax which is already accepted by the revenue could not be rejected. the appeal was rejected on the point which was not in dispute before.
The appellant, was registered with the jurisdictional Service tax authorities under the taxable category of ‘Online Information and Database Access or Retrieval Services’ (Online Services) defined under Section 65(75) and taxable under Section 65(105) (zh) of Finance Act, 1994.
The appellant was a wholly owned subsidiary of Capital IQ Inc., a company based in New York, United States of America. In the year 2004, CIQ Inc. was acquired by the McGraw-Hill Companies Inc., thus the appellant was now the sub-subsidiary of the McGraw-Hill Companies Inc. The appellant entered into an Agreement dated 01.04.2007 with CIQ Inc. to provide Online Services.
The services provided by the Appellant include processing of annual, and quarterly financial reports and press releases of over 20,000 US and International companies, extracting required data from financial statements, notes to financial statements, audit reports, etc. with the best utilisation of technologies and software developed in- house, and uploading the same on the website of Capital IQ Inc. for their access and retrieval. These services qualified as ‘export of service’ under Rule 3(1)(iii) of the Export of Services Rules, 2005, and hence the appellant was not required to deposit Service tax for the above services.
As the appellant exports 100% of its services, not being able to utilise the Cenvat credit availed by it, it filed quarterly refund claims as per Rule 5 of the Cenvat Credit Rules, 2004 and the procedure laid down in Notification no. 5/2006-Central Excise (NT) dated 14.03.2006. The Appellant filed a refund claim for the period April 2007 to June 2007.
On preliminary verification of the refund claim, the Assistant Commissioner vide provisional order dated 28.04.2008 held that the Appellant fulfils the conditions of circular no.828/5/2006 dated 20.04.2006 and allowed ad-hoc refund 80% of the total amount of refund claimed by the appellant.
Subsequently, without consideration of the Initial Order, a Show Cause Notice was issued by the Joint Commissioner to the Appellant dated 23.04.2009 whereby the refund claim filed by the Appellant for the Relevant Period was proposed to be rejected, and the amount already refunded was sought to be demanded from the Appellant,
On following grounds:-
(I) Discrepancy in the name of the remitter on FIRCs; and
(ii) Difference in the Cenvat credit shown in the return and the Cenvat
claimed as a refund.
Nikhil Gupta, on behalf of the appellant submitted that the impugned order rejecting the refund was not sustainable in law as the same had been passed without properly appreciating the facts and the law. He further submitted that the Commissioner (Appeals) had confirmed the demand based on the issues which were not in dispute from either of the parties. He further submitted that the Commissioner (Appeals) had erroneously rejected the refund claim filed by the Appellant on the points that ‘there was discrepancy in the name of the remitter in the FIRCS’ and ‘due to difference of Cenvat credit’.
He further submitted that rejecting the refund claim on the issues that were not even in dispute and were already accepted earlier by the Revenue/Department was illegal.
Aneesh Dewan, on behalf of the revenue reiterated the findings in the impugned order.
A Single Bench of S. S. Garg, Member (Judicial) directed re-adjudication observing that the Commissioner (Appeals) had rejected the appeal of the appellant on the points which were not in dispute before him.
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