Adarsh Kumar Goel, J.
C.M. No. 17038-CII of 2010:
C.M. is allowed. Substantial questions of law are taken on record.
S.T.A. No. 35 of 2010:
1. This appeal has been preferred by the revenue u/s 35G of the Central Excise Act, 1944 (for short, "the Act") read with Section 83 of the Finance Act, 1994 (as amended) against order dated 18.5.2009 in Appeal No. ST/432-433/2007-CU (DB), proposing to raise following substantial questions of law:
i) Whether the finding of the Hon''ble Tribunal that non-observance of a procedural condition of a technical nature can not be used to deny the substantive concessions, is not wrong and perverse when the filing of declaration prior to export of services as envisaged in Para 3 of the Notification No. 12/2005-ST dated 19.4.2005 is mandatory and there is no provision for condoning the delay in filing declaration?
ii) Whether the matter in issue is squarely covered by the ratio of law laid down in the judgment C.C.E. Hyderabad IV v. Deloitte Tax Services India Pvt. Ltd. as reported in 2008 (11) STR (Tri-Bang) when the claim in that case was filed by the assessee under Notification No. 5/2006-ST, whereas in the instant case claim was filed by the assessee under Notification No. 2/2005-ST?
iii) Whether some services which are used only for maintenance and repair of capital assets and the same have no direct nexus with the output services can be considered as input services? Whether the eligibility to the credit of duty paid on inputs and credit of tax paid on the input services are not contingent on the services?
iv) The appellant may be given liberty to raise any other substantial question of law which arises out of facts of the case at any stage of the case.
2. The respondent assessee is engaged in rendering customer care services falling under the category of "Business Auxiliary Services" under the provisions relating to levy of service tax under the Finance Act, 1994. It claimed credit for input services in accordance with Notification No. 12/2005-ST dated 19.4.2005. Claim of the assessee for the rebate was for the period from 19.4.2005 to 30.4.2005 and 1.5.2005 to 31.5.2005. On that basis, refund was also claimed. The original authority rejected the claim of the assessee but the appellate authority i.e. Commissioner (Appeals) upheld the plea of the assessee which has been affirmed by the Tribunal.
3. We have heard learned Counsel for the appellant.
4. The Tribunal held that Rule 5 of the Export Service Rules, 2005 provides for rebate of service tax paid on input services used for rendering of services qualifying as export services. Under the notification dated 19.4.2005, exporter is required to file declaration prior to export of service. The services in question were certainly input services. Reasonable delay in complying with the requirement of filing declaration could not be a bar to claim the benefit of the notification as there could be verification of the claim.
5. Learned Counsel for the appellant submitted that benefit of input services could not be allowed in absence of declaration having been filed before export. He also submits that services in question were not covered by the notification. Reliance has been placed on following judgments, to submit that a mandatory condition for availing benefit of input credit must be complied with:
i)
ii) Indian Aluminium Co. Ltd. v. Thane M.C.
iii)
iv)
v) Jai Shree Agro Ind. Ltd. v. CCE 2008 (224) ELT 63 (P & H)
It was further submitted that maintenance and repayment of capital assets had no nexus with output services.
6. We are unable to accept the submissions. From order of the Commissioner (Appeals), para 5, we find that declaration was filed on 9.5.2005 while notification was published on 19.4.2005. The assessee explained the delay by submitting that they had to consider various options and to obtain the management''s approval and as per judgment of the Hon''ble Supreme Court in
7. As regards judgments relied upon by learned Counsel, we find that the same are distinguishable. In the present case, condition of filing declaration was duly complied within reasonable period. Filing of declaration before export could not be held, in the circumstances, to be mandatory. Principle laid down in Mangalore Fertilizers & Chemicals'' case (supra), is clearly applicable. As regards contention of eligibility of services in question, the same can also be not accepted. The finding recorded by the appellate authority in this regard is as under:
...Any service cannot be disqualified on the basis that the same has only peripheral connection with the output service as long as it is proven the same has been used in providing export services. Once it is established that the said services have been used for providing the output service, rebate claim becomes admissible subject to verification of the payment of service tax on the said services....
8. The above finding has not been shown, in any manner, to be erroneous.
9. No substantial question of law arises.
The appeal is dismissed.
