Karnataka High Court
Principal Commissioner Of Central Tax vs M/S Huawei Technology India Pvt Ltd on 9 February, 2022
Bench: Alok Aradhe, M.G.S. Kamal
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 9TH DAY OF FEBRUARY 2022
PRESENT
THE HON'BLE MR. JUSTICE ALOK ARADHE
AND
THE HON'BLE MR. JUSTICE M.G.S. KAMAL
C.E.A. NO.7 OF 2021
BETWEEN:
PRINCIPAL COMMISSIONER OF CENTRAL TAX
BANGALORE EAST , BMTC BUILDING
OLD AIRPORT ROAD, DOMLUR
BANGALORE - 560071, KARNATAKA.
REPRESENTED BY DEPUTY COMMISSIONER
OF CENTRAL TAX
BANGALORE EAST COMMISSIONERATE
TTMC BUILDING
ABOVE BMTC BUS STAND 4TH FLOOR
DOMLUR, BANGALORE - 560071.
.... APPELLANT
(BY MR. JEEVAN J. NEERALGI, AGA)
AND:
M/S HUAWEI TECHNOLOGY INDIA PVT., LTD.,
LEVEL - 3, THE LEELA GALLERIA
THE LEELA PALACE, NO 23, AIRPORT ROAD
BANGALORE - 560008, KARNATAKA.
... RESPONDENT
(BY MR. N. ANAND, ADV., FOR
MR. B.G. CHIDANANDA URS, ADV.,)
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THIS C.E.A. IS FILED UNDER SEC.35G OF THE CENTRAL
EXCISE ACT, ARISING OUT OF ORDER DATED 02.04.2019 PASSED
IN FINAL ORDER NO.20305/2019 PASSED BY THE CESTAT,
BENGALURU REGIONAL BENCH, BENGALURU, PRAYING TO DECIDE
SUBSTANTITAL QUESTION OF LAW FORMULATED AT PARA NO.6
OF THE APPEAL MEMO. SET ASIDE THE FINAL ORDER
NO.20305/2019 DATED 02.04.2019 PASSED BY THE CUSTOMS,
EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, BENGALURU
REGIONAL BENCH, BENGALURU & ETC.
THIS C.E.A. COMING ON FOR ADMISSION, THIS DAY,
ALOK ARADHE J., DELIVERED THE FOLLOWING:
JUDGMENT
This appeal under Section 35G of the Central Excise Act, 1944 (hereinafter referred to as 'the Act' for short) has been filed against the order dated 02.04.2019 passed by the Customs Excise and Service Tax Appellate Tribunal (hereinafter referred to as 'the tribunal' for short).
2. Facts leading to filing of this appeal briefly stated are that the respondent is registered under the Service Tax Act and is engaged in providing Information Technology Certificate Services and in export of the same. The respondent filed the refund claim in respect of unutilized CENVAT credit of service tax said to have been paid by it on input service claimed to have been used by them during the period in question viz., August 2008 to September 2008, 3 October 2008 to December 2008 and January 2009 to march 2009. The aforesaid claims were filed on 31.08.2009, 07.09.2009 and 14.09.2009. Show cause notices were issued to the respondents in which it was asked to show cause as to why the claims should not be rejected on the grounds that the claimant was not registered with the service tax during the period in question and the claim for CENVAT credit was barred by limitation. The respondent filed a reply. The Assistant Commissioner Service Tax, Bangalore - II by order dated 08.01.2010 rejected the claims for refund made by the respondent inter alia on the ground that it does not possess service tax registration certificate for the period in question.
3. Being aggrieved, the respondent filed an appeal before the Commissioner of Central Excise (Appeals) - II, Bangalore. The Commissioner (Appeals) by an order dated 26.03.2012 partly allowed the appeal and inter alia held that the adjudicating authority has not mentioned any statutory provision in the Rule / Act which prescribes registration to be a pre condition for claiming benefit under the refund 4 Notification No.5/06. The appellant thereafter filed an appeal which has been dismissed by the tribunal by an order dated 02.04.2019. In the aforesaid factual background, this appeal has been filed.
4. Learned counsel for the revenue submitted that the appellate authority as well as the tribunal ought to have appreciated that the respondent was not registered and therefore, was not eligible to claim the benefit of refund under the Notification in question. In this connection, our attention has been invited to para 3 of the notification No.5/06 dated 14.03.2006. On the other hand, learned counsel for the respondent submits that the question urged by learned counsel for the revenue is no longer res integra and has been decided by two division benches of this court in 'MPORTAL INDIA WIRELESS SOLUTIONS P. LTD. VS. CST, BANGALORE, 2012 (27) STR 134 (KAR.) and 'COMMISSIONER OF S.T.BANGALORE VS. TAVANT TECHNOLOGIES INIDA PVT. LTD.', 2016 (43) S.T.R. 57 (KAR.).
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5. We have considered the submissions made on both sides and have perused the record. An assessee is required to fulfill the conditions mentioned in Rule 5 of CENVAT credit Rules, 2004, which reads as under:
Rule 5.Refund of CENVAT credit. - Where any input or input service is used in the manufacture of final product which is cleared for export under bond or letter of undertaking, as the case may be, or used in the intermediate product cleared for export, or used in providing output service which is exported, the CENVAT credit in respect of the input or input service so used shall be allowed to be utilized by the manufacturer or provider of output service towards payment of,
(i) duty of excise on any final product cleared for home consumption or for export on payment of duty; or
(ii) service tax on output service, and where for any reason such adjustment is not possible, the manufacturer or the provider of output service shall be allowed refund of such amount subject to such safeguards, conditions and limitations, as may be specified, by the Central Government, by notification:6
Provided that no refund of credit shall be allowed if the manufacturer or provider of output service avails of drawback allowed under the Customs and Central Excise Duties Drawback Rules, 1995, or claims rebate of duty under the Central Excise Rules, 2002, in respect of such duty; or claims rebate of service tax under the Export of Service Rules, 2005 in respect of such tax.
Provided further that no credit of the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act shall be utilized for payment of service tax on any output service.
Explanation: For the purposes of this rule, the words "output service which is exported" means the output service exported in accordance with the Export of Services Rules, 2005.
6. Admittedly, in the instant case there is no dispute that the respondent fulfilled the condition as set out in Rule 5 of CENVAT Credit Rules, 2004. However, the benefit of refund has been denied to the respondent on the ground that its not registered. Para 3 of the Notification No.5/06 dated 14.03.2006 does not contain any requirement with regard to 7 registration with the department as a condition precedent for claiming CENVAT Credit Rules, 2004. Even assuming that it is so, such an eligibility condition in the absence of any sanction by the Rules cannot be prescribed by way of notification. The question of law involved in this appeal is squarely covered by two decisions of this court in 'MPORTAL INDIA WIRELESS SOLUTIONS P. LTD. And 'COMMISSIONER OF S.T.BANGALORE, supra.
For the aforementioned reasons as well as for the reasons assigned by two division benches in the aforesaid judgments, no substantial questions of law arise for our consideration in this appeal.
In the result, we do not find any merits in this appeal, the same fails and is hereby dismissed.
Sd/-
JUDGE Sd/-
JUDGE ss