Custom, Excise & Service Tax Tribunal
Cce, Hyderabad vs M/S. Vijay Leasing Company on 9 December, 2010
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench Division Bench
Court I
Date of Hearing: 09/12/2010
Date of decision:09/12/2010
Appeal No.ST/575/08
(Arising out of Order-in-Appeal No.38/2008(H-II) S.Tax, dt. 12/8/2008 passed by CCE&ST(Appeals), Hyderabad)
For approval and signature:
Honble Mr. M.V. Ravindran, Member(Judicial)
Honble Mr. B.S.V. Murthy, Member(Technical)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
Whether their Lordship wish to see the fair copy of the Order?
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
Yes
CCE, Hyderabad
..Appellant(s)
Vs.
M/s. Vijay Leasing Company
..Respondent(s)
Appearance Mr. M.M. Ravi Rajendran, JDR for the Revenue.
Mr. G. Natarajan, Advocate for the respondent.
Coram:
Honble Mr. M.V.Ravindran, Member(Judicial) Honble Mr. B.S.V. Murthy, Member(Technical) FINAL ORDER No._______________________2010 Per M.V.Ravindran This appeal is filed by the Revenue against the Order-in-Appeal No.38/2008(H-II) S.Tax, dt. 12/8/2008.
2. The relevant facts that arise for consideration are that the respondents herein got themselves registered under the category of Site formation and clearance, excavation and earthmoving and demolition service and paid service tax under the said category for the period 16/6/2005 to 30/9/2006. The respondents were engaged in providing services of mining to their clients / principals. With introduction of separate service under the category of mining service w.e.f. 01/06/2007, the respondents were of the view that their service would fall under the new category and the service tax paid by them was not statutorily required to be paid. Accordingly, they preferred a refund claim for an amount of Rs.1,58,11,007/-. The Adjudicating Authority after following the principles of natural justice rejected the said refund claim. Aggrieved by such an order, the respondents preferred an appeal before the Commissioner(Appeals) who set aside the impugned order and allowed their refund claim. Revenue is in appeal against such an order.
3. Ld. DR would draw our attention to the clarifications issued by the Board when the mining service came into the service tax net. He would submit that the services provided in relation to mineral mining oil and gas are comprehensively covered under the proposed service would indicate that earlier they were covered under Site formation and clearance, excavation and earthmoving and demolition service . He would also draw our attention to CBECs circular dt. 12/11/2007 and submit that excavation, drilling and removal of overburdens in the mine would be covered under the definition of Site formation and clearance, excavation and earthmoving and demolition service. He would submit that in this case the contracts entered by the respondents with the principals indicate that there being the excavation, drilling and demolition service. It is also his submission that the respondents having discharged the service tax liability on self-assessment, could not filed a refund claim without there being any challenge. He would rely upon the decision of the Tribunal in the case of KEC International ltd. Vs. CCE, Jaipur-I [2006(4) STR 473 (Tri. Del.)] and in CCE, Chennai Vs. EID Parry India Ltd. [2006(4) STR 585 (Tri. Chennai)] for the proposition that once self-assessment is done, the amount is not refundable. He would draw our attention to the various grounds of appeal taken by the Department which are mainly regarding the inclusion of the service under the category of Site formation and clearance, excavation and earthmoving and demolition service.
4. Ld. Counsel appearing on behalf of the respondent would draw our attention to the various clauses of the agreements, entered by them with their principals. He would submit that the contracts would clearly indicate that the respondents were supposed to do the entire mining activity and till the excavation of Iron ore and processing of Iron ore. He would draw our attention to the consideration clause which indicate that they were liable to be paid for every ton Iron ore which has been taken out of the mine. He would submit that for taking of Iron order from a mine, incidental work like leveling, site formation, clearances, excavation etc. are required to be done. He would submit that this Bench in the case of M. Ramakrishna Reddy Vs. CCE&C, Tirupathi [2009(13) STR 661(Tri. Bang.)] has clearly held that removal of overburdens and excavation of ore undertaken as per contract, would fall under the category of mining services and liable to be taxed under the head from 01/06/2007 only. He would also submit that the Honble High Court of Rajasthan in the case of Central Office Mewar Palace Org. Vs. UOI [2008(12) STR 545 (Raj.)] has clearly held that the self-assessment would not amount to assessment done by an officer and hence there is no restriction for claim of the refund of the duty so self-assessed.
5. We have considered the submissions made at length by both sides and perused the records.
6. The ld. Commissioner(Appeals) while setting aside the Order-in-Original has clearly recorded the following factual findings, after considering the contracts which were produced before him:-
6. . . On the other hand, as seen from the contract entered into by the appellants, they are primarily engaged for Winning the minerals i.e. extraction of iron ore and the other activities performed by them such as excavation, processing i.e. grading, sorting etc. and related / incidental transport, loading activities etc., are all incidental to the main activity of mining. The activity of excavation, undertaken by the appellants should be understood in the context of the primary activity undertaken by them, not withstanding the dictionary meaning of excavation, on which the lower authority has so heavily harped.
7. .. . . .
8. .. . The lower authority has taken the view that the activity undertaken by the appellants is excavation, which is already defined under the head Site formation and clearance, excavation and earthmoving and demolition and hence the service undertaken by them does not attract the provisions of Section 65(2). In my view, this argument is not tenable. As already explained supra, the work undertaken by the appellants is of composite nature and the essential character of work undertaken by them is Mining or Winning of Minerals, which certainly cannot be classified under the service category Site formation and clearance, excavation and earthmoving and demolition. The said category of service is leviable to service tax only with effect from 1/6/2007 i.e. after the introduction of mining service in the statute. The above reproduced factual findings are not challenged by the Revenue in their grounds of appeal. On perusal of the contracts which were produced before us by the respondents, we are in agreement with the findings of the ld. Commissioner(Appeals) that the activity of Site formation and clearance, excavation and earthmoving and demolition etc. are incidental to the contract of the mining of Iron ore undertaken by the respondents. In view of this, factually, the activity of the respondents during the relevant period when they paid the service tax was not taxable under the category of Site formation and clearance, excavation and earthmoving and demolition service. It is also undisputed that the services rendered by them would fall under the category of mining services and such services become liable for service tax from 01/06/2007 as is settled by this Bench in the case of M. Ramakrishna Reddy (supra).
7. We now address to the submissions made by the ld. JDR as regards the refund of the amount paid by the assessee on self assessment. It is his submission that the assessee having self-assessed, the amount of service tax payable and having discharged the same with interest, cannot now turn around and claim that he has paid the service tax, wrongly. This argument put forth by the ld. JDR is untenable for more than one reason. First of all, it is an admitted fact that the amount paid by the assessee under the self-assessment as per the provisions of the Finance Act, 1994. When the respondents came to know that the activity undertaken by them under these contracts would fall under the mining activity which came into service tax net from 01/06/2007, the assessee was justified in filing the refund claim as the self-assessment cannot be considered as an assessment made by an officer under Section 73 against which an appeal or challenge lies. We find that the Honble High Court of Rajasthan in the case of Central Office Mewar Palace Org. (supra) has clearly settled the law, which we may respectfully, reproduce:-
This appeal has been filed by the assessee seeking to challenge the impugned orders of the Tribunal, so also of the authorities below. The appeal was admitted vide order dated 14-2-2007, on the following substantial question of law :-
Whether in the facts and circumstances the claim to refund of service tax which has been paid in excess wrongly could have been refused?
2.?The necessary facts are, that the assessee voluntarily deposited certain amounts with the department, purportedly representing service tax on different services, which were charged by the assessee from its sister concerns/clients, for the period September 1999 to May 2000. Realising that those services were not chargeable to service tax, the assessee issued credit notes with respect to the entire amounts to its concerns/clients, and lodged a claim for refund on 24-11-2000, for a sum of Rs. 3,40,040/-, which was subsequently revised on 18-12-2000 to Rs. 3,36,980/-.
3.?The learned Assistant Commissioner issued show cause notice to the assessee, calling upon, as to why the claim for refund be not rejected, as the assessee has not produced the evidence to establish justification of the claim. This notice was replied to the effect, that they would furnish original invoices raised on account of non-taxable services, and the original debit/credit notes raised in favour of the clients, and evidence regarding payment received only for the balance amount after adjustment of such credit notes.
4.?However, the learned Assistant Commissioner found, that the representative of the company, who appeared showed credit/debit notes issued to their clients/sister concerns, but could not produce invoices, details/evidence of value, ascertained for non-taxable/taxable services. With this, it was also found, that the assessee-company as a whole is registered, and has been depositing service tax, which covers all taxable services rendered by the company to its clients, and that the main purpose of carrying on the operations of the company is to centralise all the professional functions in a totally de-centralised environment, through recruiting the professionals who are expert in the particular field. The learned Assistant Commissioner also found, that the assessee did not furnish complete details and evidence relating to refund claim to verify amount claimed by the assessee. The claim and documents did not show as to how they arrived at the value of non-taxable services, and that mere production of statement showing value of unit-wise taxable services and services, which are non-taxable services cannot be considered authentic/genuine document, for the purpose of granting refund. It was also found, that nowhere the evidence produced by the assessee establish, that the service tax collected by them has not been virtually passed on to their clients/customers, and thus, it was observed, that incidence of burden has been passed on to the clients/customers, apart from the fact that assessee has collected tax without authority of law for non-taxable services, and by merely raising credit notes, does not authorise the assessee to claim refund. Thus, the prayer for refund was rejected.
5.?The appeal against this order was filed, which was dismissed by the Commissioner, by adopting an entirely different process of reasoning, viz. that all the services with respect to which the service tax was charged are included under the head Manpower Recruitment Agency and Security Services and that they are covered by the definition of Management Consultant. Thus it was found, that the services were taxable, and the appeal was dismissed. It may be observed, that contention of the learned counsel for the appellant was, that all necessary documents been produced before the learned Assessing Officer.
6.?The matter was carried in further appeal before the learned Tribunal, and surprisingly, the Tribunal dismissed the appeal by adopting yet different reasoning, viz. that since the assessee had not challenged the assessment order, the claim of refund cannot be entertained, so as to indirectly challenge the assessment order, without filing statutory appeal, against the assessment order. It was also found, that in the case in hand, the order is appelable and no appeal having been filed, the claim of refund has no merit, and the appeal was dismissed.
7.?We have heard learned counsel for the parties, and have gone through the relevant provisions of the Finance Act, 1994, enacting provisions for levy of service tax, so also the relevant provisions of Central Excise Act, as well.
8.?At the outset, it may be observed, that under the scheme of things, starting from Section 73 onwards it is clear, that the assessee himself is to deposit service tax in form ST-3, there is no provision for assessment. Passing of assessment order is contemplated only in cases where the notice is issued under Section 73, and it is found, that service tax is not levied or paid, or has been short levied or short paid etc. In that view of the matter, the very basis/reasonings given by the learned Tribunal, simply have no legs to stand. Admittedly, the appeal under Section 85 lies against a specific order of the concerned authority in Form ST-4, which requires to disclose, designation and address of the officer passing the decision or order appealed against, and the date of decision or order, so also the date of communication of the decision or order appealed against to the appellant. Admittedly, when no order capable of being appealed against, had ever been passed, it cannot be said that the assessee could file appeal against the assessment order, and not having so filed appeal he cannot lay the claim of refund. Thus, the order of the Tribunal cannot sustain.
9.?Then so far as the reasonings adopted by learned Commissioner are concerned, the learned Counsel for the appellant has invited our attention to Annex. 4, another order of the same authority, being Commissioner dated 30th September 2005, passed in the case of the assessee itself, for the subsequent period April 2000 to March 2002, wherein it has clearly been held, that all these services as cataloged in the said order are not chargeable to service tax. And consequently the proceedings initiated against the assessee, wherein the adjudicating authority had demanded tax, were set aside, and the proceedings were dropped. It is not shown, that this order dated 30-9-2005 has, at all been appealed against, nor has it otherwise been shown to be wrong. In that view of the matter, the reasonings given by the learned Commissioner, in the order Annex. 2, also cannot sustain.
10.?Then remains the order Annex.1, which proceeds on the basis, as quoted above, while according to the learned counsel for the appellant, all relevant and necessary documents had been shown in original, and photostat copies were produced on record, but they have not been looked into.
11.?In that view of the matter, the question as framed is required to be answered against the Revenue, and in favour of the assessee, but at the same time, the relief which we are inclined to grant is, only to the effect, that while setting aside the orders Annex. 2 and 3, we remit the matter back to the Commissioner (Appeals-II), Central Excise and Customs, Jaipur, to restore the appeal to its original number, and adjudicate the claim of the assessee afresh, in accordance with law, keeping in view the observations made above, and also keeping in view the order passed by the said Commissioner dated 30-9-2005, in the case of the assessee itself. The Commissioner is also directed to decide the appeal expeditiously.
12.?The appeal is accordingly allowed. The orders of the Tribunal and the Commissioner are set aside and the matter is remanded as above.
8. We find from the above reproduced judgment of the Honble High Court, that the point raised by ld. DR, is now squarely settled in favour of the assessee. In view of this, the Tribunals decision relied upon by the ld. JDR will be of no consequence.
9. Accordingly, we are of the considered view that the findings reached by the ld. Commissioner(Appeals) in the impugned order are correct, proper and legal and does not require any intereference. Appeal filed by the Revenue is rejected.
(Operative portion of this order pronounced on conclusion of the hearing) (B.S.V. MURTHY) MEMBER (TECHNICAL) (M.V.RAVINDRAN) MEMBER (JUDICIAL) Nr 9