By TIOL News Service

MUMBAI, FEB 23, 2018: REVENUE is in appeal before the Bombay High Court and proposes the following substantial questions of law:-

"(a) Whether in the facts and circumstances of the case and law applicable thereon, the CESTAT was right in holding that the assessee is entitled for refund of Cenvat Credit i.e. Service Tax paid on taxable input services utilised, under the provisions of Notification No. 17/2009- ST dated 07.07.2009 (as superseded by Notification No.52/2011-ST dated 30.12.2011).

(b) Whether the CESTAT was right in not considering all the grounds of appeal raised before the appeal filed before it and passing order without considering them."

The respondent-assessee is engaged in the business of import of rough diamonds and manufacture and export of polished diamonds. They claimed refund of Cenvat Credit availed on the services, namely, banking and financial services and technical inspection and certification services, utilised for export business.

The lower authorities rejected the claim on the ground that there was no co-relation or nexus established between the input services and the export.

However, the CESTAT allowed the appeal by observing that the assessee, who is engaged in the business of export of goods, is entitled to avail Cenvat Credit for various services which are used for rendering the goods exportable; that the banking services are utilised for raising finance for import as well as export of the goods manufactured by it; technical inspection and certification services are co-related with export. Reliance was placed on the decision in Oil and Natural Gas Corporation Ltd. - 2013-TIOL-202-HC-MUM-ST.

Revenue, as mentioned, is aggrieved with this order.

After mentioning that the reliance placed by the counsel for the Revenue to the case of Kbace Tech Pvt. Ltd. vs. Commissioner of Central Excise and Service Tax, Bangalore - 2010-TIOL-564-CESTAT-BANG was misplaced, the High Court adverted to its decision dated 12 February 2018 involving identical issues in M/s. J. P. Morgan Services (I) Pvt. Ltd. CEXA/169/2015 and held that no substantial question of law arises for consideration.

Inasmuch as concluding that the tribunal's order is not vitiated by any error of law apparent on the face of the record and perversity, the Revenue appeal was dismissed.

(See 2018-TIOL-329-HC-MUM-ST)