The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), recognised services to overseas are export, eligible for refund of cenvat credit and held eligible for a refund of cenvat credit and granted relief to Idex India Pvt Ltd, the appellant.
The appellants are into the business of providing taxable services in the categories of Business Support Services, Internet and Telecommunication Services etc. During the period the appellants filed five refund claims under notification no. 27/2012-CE(NT) read with Rule 5 ibid for unutilised accumulated Cenvat Credit.
The Adjudicating Authority rejected all five refund claims filed by the appellant on the ground that the services provided by the appellants to their clients cannot be treated as export of service as provided under Rule 6A of the Service Tax Rules and therefore they are not eligible for a refund of the Cenvat Credit lying in balance under the provisions of Rule 5 rather they are covered under Rule 4(a) of Place of Provision of Service Rules, 2012 and the place of provision of service is the location of the service provider which is in India.
The issue involved is whether the appellants are eligible for the refund of unutilised credit under Rule 5 ibid read with Notification No. 27/2012-CE(NT) dated 18.06.2012 and whether the Place of Provision of Service herein is to be decided under Rule 3 or Rule 4(a) of Place of Provision of Service Rules, 2012.
The Counsel for the appellant submitted that the impugned order travels beyond the scope of show cause notice as there were no references in the show cause notice with respect to after-sales support services and Account and Management Reporting Services or Rule 4 of POPS Rules whereas the impugned order relied upon them also while rejecting the refund claim of the appellant and therefore the orders of authorities below are beyond the scope of show cause notice and liable to be set aside on this ground itself.
The Tribunal of Ajay Sharma, Judicial Member observed that “As a result in the facts of the present case, the Place of Provision has to be determined in terms of Rule 3 of POPS Rules, 2012 and are not covered under Rule 4(a), therefore the services provided by the appellant to its overseas entities clearly qualify to be export and they are eligible for a refund.”
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