ST - Refund - Rule 5 - Ground taken in Revenue appeal that nexus is required to be proved of input services used for services provided outside India was not ground of rejection of refund by adjudicating authority, hence appeal not sustainable: CESTAT
By TIOL News Service
MUMBAI, AUGUST 18, 2014: THIS is a Revenue appeal.
The respondent assessee is engaged in providing taxable services falling under the category of "Information Technology Software Services" and is registered with the Service Tax Department. They exported services and preferred claim of refund under the Rule 5 of the CCR, 2004 but were rejected mainly on the ground that the invoices are raised in the name of different parties whereas the remitter of foreign exchange appears to be different. The address on some of the input invoices of the appellant are not proper as it shows the address of the Link Way Estate, Link Road, Malad (W), Mumbai, whereas the registered office is located at 2 nd Floor, B Wing, Acme I-I Park, Old Nagardas Road, Mogra Village, Andheri (E), Mumbai. The second ground of rejection is, values of taxable services do not tally with the amount received in the given quarter.
The Commissioner (Appeals) allowed the appeal on the ground that there is no dispute as regards compliance of Rule 3(2) of the Export of Service Rules. Furthermore, as regards the difference in name of service receiver and name of remitter of foreign exchange, the appellant explained that have engaged payment handlers outside India, who chase the payment with the recipient of service and having collected the same, remitted the amount to the appellant after following the provisions under FEMA and accordingly, there is no ground for rejection of refund claim. In the matter of address in the invoices, the corporate office was shifted in the year 2009, the appellant had submitted. Further, as regards the difference in the value of the services, it is stated that the value of services rendered and the value of invoices raised can never be the same, a common occurrence in business, with regard to remittance received during the relevant period and it is not a discrepancy. It is also common that the payments are received after few months from the raising of invoices, upon settlement.
As mentioned, Revenue is in appeal.
The Bench observed -
"5. The ground no. (i), (ii) and (v) raised by Revenue in the appeals are to the effect that the value of taxable service exported does not tally with the figures shown in St-3 return. So far the above mentioned ground is concerned, the Revenue relies on the Order-in-Original but is unable to dispute the findings of the lower appellate authority and also the points urged in cross-objection field before the Tribunal. The next ground (iii) taken in the appeal is nexus is required to be proved of the input services used for services provided outside India, the same is required under condition No. 5 of Notification No. 5/2006. So far this ground is concerned, I find from the Order-in-Original that this was not the ground of rejection of refund, hence not sustainable. The next ground taken is with regard to address mentioned on some of the invoices, which is at Link Way Estate, Link Road, Malad (W), Mumbai, which is appropriately explained by the respondent in the cross-objection and a categorical finding is also recorded in para 8 of the impugned order. As the said finding of Commissioner (Appeals) has not been challenged, I hold that this ground is also not sustainable. No substantial question is raised vide ground Nos. (iv) & (vi) and the same stand rejected."
In fine, the Revenue appeals were dismissed and the cross-objections filed by the respondent were allowed with consequential relief. The adjudicating authority was directed to issue the refund within 30 days with interest.
(See 2014-TIOL-1522-CESTAT-MUM)
