whether refund deniable on the ground that the address on some invoice was different?

PJ/CASE LAW/2015-16/2711

Case:-COMMR. OF SERVICE TAX, MUMBAI VersusMONETIZATION SOFTWARE PVT. LTD.

Citation:-2015 (38) S.T.R. 149 (Tri. - Mumbai)

Brief facts:-The Revenue was in appeal against common Order-in-Appeal Nos. 408-411, dated 4-10-2013 passed by the Commissioner of Central Excise & Service Tax (Appeals), Mumbai-IV by which he was pleased to allow the refund under Rule 5 of the Cenvat Credit Rules, 2004, which was earlier rejected vide order of adjudication dated 18-6-2010 and other orders as mentioned in the table below: -

Sr. No.	Order-in-Original No. & Date	Period involved	Refund amount	Amount sanctioned	Amount rejected
1	ST/ DIV-IV/46/2010-11, dated 18-6-2010	Oct. to Dec., 2008	1,89,241	00	1,89,241
2	ST/DIV-IV/49/2010-11, dated 18-6-2010	Jan to March, 2009	2,25,528	00	2,25,528
3.	ST/DIV-IV/48/20l0-11, dated 18-6-2010	April to June, 2009	2,42,086	00	2,42,086
4.	ST/DIV-IV/47/20l0-11, dated 18-6-2010	July to Sept., 2009	1,51,010	00	1,51,010
		Total	8,07,865	00	8,07,865

The brief facts were that the respondent assessee M/s. Monetization Software Pvt. Ltd. is engaged in providing taxable services falling under the category of “Information Technology Software Services” and were registered with the Service Tax Department. Further, the appellant exported services which were in respect of Computer Software Services and accordingly preferred claim of refund under the amended Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No. 5/2008-CX(NT), dated 14-3-2006. The claims were rejected vide the Orders-in-Original dated 18-6-2010 mainly on the ground that the invoices were raised in the name of different parties whereas the remitter of foreign exchange appeared to be different. The address on some of the input invoices of the appellant were not proper as it showed the address of the Link Way Estate, Link Road, Malad (W), Mumbai, whereas the registered office was located at 2nd Floor, B Wing, Acme I-I Park, Old Nagardas Road, Mogra Village, Andheri (E), Mumbai. The second ground of rejection was, values of taxable services did not tally with the amount received in the given quarter and different with CENVAT credit amount as per ST-3 return and the refund claim preferred.

Appellant’s contention:-The appellant urged the following grounds before the Commissioner (Appeals), that there was no dispute regarding the output services in compliance of Rule 3(2) of the Export of Services Rules, which require the rendering of services from India and used outside India by the service recipient and the second condition was receipt of consideration for the services in convertible foreign exchange, and both these conditions were satisfied. So far the difference in name of service receiver for export of service and name of remitter of foreign exchange is concerned, it was explained that the appellant were 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 was no ground for rejection of refund claim. So far the conclusive findings regarding the address in the input invoices was concerned, it was pointed out that the appellant previously had it corporate office at the given address at Link Way Estate, Malad, Mumbai, which was subsequently changed some time in year 2009. In this regard, it was pointed out by the Counsel from page 41 of the Cross-Objection which was a copy of the refund claim, in the footnote both the address was shown of the registered office and corporate office at Andheri and Malad. As such, the discrepancy pointed out by the adjudicating authority does not stand. 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 with regard to remittance received during the relevant period and it was not a discrepancy. Further, reference was drawn at page 30 of the Cross-Objection, which was a copy of ST-3 return for the period October, 2008 to March, 2009, recorded in column 3(F)(1)(a), the gross amount received against service provided for the quarter October to December, 2008 is shown as Rs. 1,64,75,500/-, whereas at column 3(F)(II)(j), gross amount for which invoices are issued relating to the services provided for the same period is shown as Rs. 3,39,34,200/-. It was common in business that when the amount of bills were raised more particularly in the case of services, the same were settled later on at some reduced figure with respect to certain claim made by the recipient of service. It was also common that the payments were received after few months from the raising of invoices, upon settlement. Thus, in the given period, the payment received was with reference to the bill for the earlier period, whereas the payment for the bills raised for same period were bound to be settled and received later on. Accordingly, being satisfied the Commissioner (Appeals) was pleased to allow the appeals of the respondent assessee with a direction to grant refund.

Reasoning of judgment:-the ground Nos. (i), (ii) and (v) raised by Revenue in the appeals were to the effect that the value of taxable service exported did not tally with the figures shown in ST-3 return. So far the above mentioned ground was concerned, the Revenue relied on the Order-in-Original but was unable to dispute the findings of the lower appellate authority and also the points urged in cross-objection filed 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 was required under condition No. 5 of Notification No. 5/2006. So far this ground was concerned, he found from the Order-in-Original that this was not the ground of rejection of refund, hence not sustainable. The next ground taken was with regard to address mentioned on some of the invoices, which was at Link Way Estate, Link Road, Malad (W), Mumbai, which was appropriately explained by the respondent in the cross-objection and a categorical finding was also recorded in para 8 of the impugned order. As the said finding of Commissioner (Appeals) had not been challenged, he held that this ground was also not sustainable. No substantial question was raised vide ground Nos. (iv) & (vi) and the same stood rejected.

Having considered the rival contentions and in view of the finding recorded above, he found that none of the grounds of the Revenue are allowable and accordingly, the appeals are 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 from the production of a copy of this order by the assessee-respondent with interest as per rules.

Decision:-appeal dismissed

Comment:-The gist of the case is that as the assessee had written footnote in the refund regarding change of address therefore the benefit cannot be denied on such a negligible error.

{prepared by:-Prayushi jain}

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PJ/CASE LAW/2015-16/2711

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