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Integra Software Services Pvt. Ltd V/S CCE, Pondicherry

Company & Directors' Information:- R S SOFTWARE (INDIA) LTD. [Active] CIN = L72200WB1987PLC043375

Company & Directors' Information:- C K SOFTWARE PRIVATE LIMITED [Active] CIN = U72501DL2000PTC106184

Company & Directors' Information:- INTEGRA SOFTWARE SERVICES PRIVATE LIMITED [Active] CIN = U72300TN2000PTC111590

Company & Directors' Information:- K K SOFTWARE PRIVATE LIMITED [Active] CIN = U72900DL2009PTC193030

Company & Directors' Information:- A K C SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2004PTC128462

Company & Directors' Information:- A S SOFTWARE SERVICES PRIVATE LIMITED [Active] CIN = U72900DL2009PTC195106

Company & Directors' Information:- P AND P SOFTWARE PRIVATE LIMITED [Active] CIN = U74899DL1994PTC057212

Company & Directors' Information:- SOFTWARE INDIA PRIVATE LIMITED [Active] CIN = U72200GJ1995PTC025791

Company & Directors' Information:- N. D. SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200TG1998PTC029778

Company & Directors' Information:- T AND H SOFTWARE PRIVATE LIMITED [Active] CIN = U72200UP2000PTC025638

Company & Directors' Information:- M S SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2005PTC133997

Company & Directors' Information:- CCE SOFTWARE PRIVATE LIMITED [Active] CIN = U72200WB1999PTC090526

Company & Directors' Information:- G A S SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2004PTC127546

Company & Directors' Information:- B B SOFTWARE LTD [Strike Off] CIN = L30009WB1995PLC072361

Company & Directors' Information:- H K SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200WB2001PTC093967

Company & Directors' Information:- J SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200TZ2000PTC009229

Company & Directors' Information:- K S M SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2004PTC128463

Company & Directors' Information:- R B SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2005PTC140322

Company & Directors' Information:- SOFTWARE INDIA PRIVATE LIMITED [Active] CIN = U72200RJ1995PTC010577

Company & Directors' Information:- R J SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2005PTC133815

Company & Directors' Information:- H J SOFTWARE PRIVATE LIMITED [Active] CIN = U72200TG2007PTC056351

Company & Directors' Information:- I & I SOFTWARE INDIA PRIVATE LIMITED [Strike Off] CIN = U72200TN2005PTC056262

Company & Directors' Information:- D F SOFTWARE INDIA PRIVATE LIMITED [Strike Off] CIN = U72200TZ2003PTC010629

Company & Directors' Information:- E. C. SOFTWARE INDIA PRIVATE LIMITED [Active] CIN = U72900TN2007PTC063486

Company & Directors' Information:- Q 3 INDIA SOFTWARE PRIVATE LIMITED [Active] CIN = U72900TN2007PTC065786

Company & Directors' Information:- K Y SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200DL2005PTC136072

Company & Directors' Information:- T M I SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200KA2005PTC036299

Company & Directors' Information:- B C L SOFTWARE (INDIA) PRIVATE LIMITED [Strike Off] CIN = U30007MH1999PTC117922

Company & Directors' Information:- C C M SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200TG2000PTC034002

Company & Directors' Information:- INTEGRA PRIVATE LIMITED [Strike Off] CIN = U99999DL1972PTC006024

Company & Directors' Information:- M I S SOFTWARE PRIVATE LIMITED [Active] CIN = U72200TN2008PTC068694

Company & Directors' Information:- A. T. SOFTWARE PRIVATE LIMITED [Active] CIN = U72200TG1996PTC023841

Company & Directors' Information:- J A K SOFTWARE PVT LTD [Active] CIN = U72200DL2001PTC111929

Company & Directors' Information:- R R SOFTWARE PVT LTD [Under Process of Striking Off] CIN = U72200KL1991PTC006051

Company & Directors' Information:- A M H SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200DL2005PTC132410

Company & Directors' Information:- P D A SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72900DL2003PTC123465

Company & Directors' Information:- K C SOFTWARE PRIVATE LIMITED [Active] CIN = U74899DL1989PTC036923

Company & Directors' Information:- I SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72300MH2012PTC225903

Company & Directors' Information:- V M SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72900PN2010PTC136847

Company & Directors' Information:- K M R SOFTWARE SERVICES PRIVATE LIMITED [Active] CIN = U72900TG2013PTC086983

Company & Directors' Information:- H M SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200HP2011PTC031756

Company & Directors' Information:- S N R SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72900DL2012PTC243073

Company & Directors' Information:- K A V SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2005PTC144121

Company & Directors' Information:- C M S SOFTWARE PRIVATE LIMITED [Active] CIN = U74899DL2005PTC142352

Company & Directors' Information:- S M I T SOFTWARE COMPANY PRIVATE LIMITED [Strike Off] CIN = U74899DL2006PTC144816

Company & Directors' Information:- A D SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200KA2002PTC030722

Company & Directors' Information:- B M SOFTWARE SERVICES PRIVATE LIMITED [Strike Off] CIN = U72200TG2007PTC054190

Company & Directors' Information:- H. A. N. R. E. J SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200TG2008PTC062044

    ST/42249-42250/2016 (Arising out of Order-in-Appeal Nos. 284, 285/2016) dated 29.07.2016 passed by the Commissioner of Central Excise (Appeals-II), Chennai) and Final Order Nos. 40623-40624/2017

    Decided On, 13 April 2017

    At, Customs Excise Service Tax Appellate Tribunal South Zonal Bench At Chennai

    By, MEMBER

    For Petitioner: S. Ramachandran, Consultant And For Respondents: S. Govindarajan, AC (AR)

Judgment Text

1. The issue in dispute relates to culling of refund claims filed by the appellants under Rule 5 of Cenvat Credit Rules, 2004, to deny credit of certain input services which were considered as ineligible for the purpose of availing input service credit. After due process of adjudication, refund claims were only partly sanctioned, rejecting the amounts pertaining to Cenvat credit involved on Renting of Immovable Property service, Commercial Training or Coaching service, Telecommunication Services, Management or Business Consultancy service, Sponsorship Service, Maintenance & Repairs Service of Guest House etc. On appeal, the Commissioner (Appeals) vide common impugned order dated 29.07.2016, upheld the orders original authority and rejected the appeals as devoid of merit. Aggrieved, appellants are before this forum.

2. Today when the matter came up for hearing, ld. Consultant Shri S. Ramachandran, appearing on behalf of the appellant submits that they are not pressing the issue in respect of sponsorship service and maintenance and repair service of guest house. In respect of other disputed input services, he contends that appellants should be eligible to avail of the service tax credits thereon for the following reasons:-

(i) Ld. Consultant submits that the Director had paid service tax in respect of Renting of Immovable Property by mistake since the building was leased to the appellant by the Director of the Company.

ii) In respect of Commercial Coaching and Training, service tax demand of Rs. 13,346/- is involved, which pertains to delegate fees and participation fees paid to AIMA and STC, CII, for the employees who were nominated to take such training.

iii) In respect of Telecommunication service, landline and mobile telephone bills which were paid by the appellant company in the name of the Managing Director, who used such service.

iv) In respect of Management Consultancy service, the said services were rendered by in relation to sales, marketing and strategy, however, department has denied service tax paid in relation to travel expenses charged by the consultant in addition to the consultancy charges.

3. On the other hand, ld. AR Shri S. Govindarajan supports the impugned order. He points out that renting of immovable property service related to the property owned by the Director of the Company. It was not the case that the company had leased or provided accommodation to the said director as per the terms of employment. For the reason, service tax paid by the appellant cannot become an eligible input service. Relating to telecommunication service, ld. AR submits that the landline/mobile telephones were in the personal name of the concerned employee of the company. Therefore, it is not forth-coming whether they have been used by the employees in relation to the activities of the appellant, or whether the appellants have paid the bills. As far as the management or business consultancy service is concerned, he submits that the transportation charges being separate from the consultancy charges, service tax paid on that cannot be availed as cenvat credit. At the most it would be input service for the consultancy service not for the appellants.

4. Heard both sides and gone through the facts of the case.

5.1 From the impugned orders, it becomes clear that the appellants themselves have admitted that they have paid the service tax liability in respect of renting of immovable property by mistake. Ld. Advocate contented that since such payment has been paid by mistake, department should have given refund of this amount also or otherwise, should allow re-credit of the same. However, what comes to the fore is that this dispute relates to claim of refund under Rule 5 of Cenvat Credit Rules, which inter alia facilitates refund of input credit or input service tax credit which are used directly or indirectly in the manufacture of finished goods. This being so, even if the appellants have paid or suffered tax liability by mistake, they cannot claim the refund thereof under Rule 5 ibid but, under other facilitating provisions in the law. In the circumstances, I do not find any infirmity in the rejection of service tax credit relating to such renting of immovable property service. Appeal on this score is therefore rejected.

5.2 On the matter of Commercial training or coaching services, that relates to training of nominated employees. I find that this would be an eligible input service, and in particular, they are also not barred by exclusion clause of Rule 2(1) of CCR, 2004.

5.3 Coming to the Tele-communication service, concerning landline/mobile telephones installed at the residence of the employee, I am of the considered opinion that the credit should be permitted. Though the ld. AR has points put that these are in the individual names of the employee and not in the name of the appellants, however, there is no allegation that they have not been used for the purpose of the appellant's business or for that matter, only for the personal use and consumption of an employee. This view finds sustenance in the following Tribunal decisions which have been correctly relied upon by the ld. Consultant.

1. Reltech Energies Limited Vs. CCE, Mangalore : 2008 (10) STR 280 (Tri.-Bang.)

2. Vishal Pipes Ltd. Vs. CCE, Noida : 2015 (40) STR 1091 (Tri.-Del.)

3. ITC Ltd. Vs. CC & CE, Salem 2009 (14) S.T.R. (Tri.-Chenn.)

4. DCW Ltd. Vs. CCE, Tirunelveli : 2011 (22) STR 214 (Tri.-Chen.)

5.4 Coming to the dispute in response to credit availed on management or business consulta

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ncy service, I find that department has not disputed the credit availed on the management consultancy charges per se. What has been denied is the additional charges for transportation claimed by the consultancy. Appellant has not produced any contract or agreement wherein such transport charges are required to be paid, in addition to the consultancy charges. This being so, I am of the opinion that the credit availed in respect of such transport charges will not be eligible for the purpose of refunds under Rule 5 ibid. Appeals on this score is also rejected. 6. Appeals are partly allowed on the above terms.