Custom, Excise & Service Tax Tribunal
Ms T2S Software Solutions Pvt Ltd vs Commissioner Of Gst&Amp;Cce (Chennai ... on 25 July, 2019
1
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
CHENNAI
REGIONAL BENCH - COURT NO. I
Service Tax Appeal No. 40512 of 2019
(Arising out of Order-in-Appeal Nos. 697 & 698/2018 (CTA-II) dated 28.12.2018
passed by the Commissioner of Central Tax (Appeals-II): C.G.S.T. & Central Excise,
Newry Towers, 2054/1, II Avenue, 12th Main Road, Anna Nagar, Chennai - 600 040)
M/s. T2S Software Solutions Pvt. Ltd., : Appellant
SPINFOCITY, Block A, 1st Floor, Perungudi,
Chennai - 600 096
VERSUS
The Commissioner of G.S.T. & Central Excise, : Respondent
Chennai South Commissionerate, No. 692, Anna Salai, MHU Complex, Nandanam, Chennai - 600 035 WITH Service Tax Appeal No. 40513 of 2019 (Arising out of Order-in-Appeal Nos. 697 & 698/2018 (CTA-II) dated 28.12.2018 passed by the Commissioner of Central Tax (Appeals-II): C.G.S.T. & Central Excise, Newry Towers, 2054/1, II Avenue, 12th Main Road, Anna Nagar, Chennai - 600 040) M/s. T2S Software Solutions Pvt. Ltd., : Appellant SPINFOCITY, Block A, 1st Floor, Perungudi, Chennai - 600 096 VERSUS The Commissioner of G.S.T. & Central Excise, : Respondent Chennai South Commissionerate, No. 692, Anna Salai, MHU Complex, Nandanam, Chennai - 600 035 APPEARANCE:
Shri. S. Ramachandran, Consultant for the Appellant Shri. K. Veerabhadra Reddy, Authorized Representative for the Respondent CORAM:
HON'BLE MR. P. DINESHA, MEMBER (JUDICIAL) FINAL ORDER NOs. 40964-40965 / 2019 2 DATE OF HEARING: 12.07.2019 DATE OF DECISION: 25.07.2019 Brief facts are that the appellants are exporters of service under the category of Information Technology Software Service ('ITSS' for short) and had filed two applications for refund both dated 21.06.2017 for the periods from April 2016 to September 2016 and October 2016 to March 2017 under Rule 5 of the CENVAT Credit Rules, 2004.
2. After issuing Show Cause Notices, Orders-in- Original No. 109/2018 (R) dated 30.08.2018 and 110/2018 (R) dated 31.08.2018 came to be passed rejecting the refund claims and the same came to be upheld by the Commissioner of Central Tax (Appeals-II):
C.G.S.T. & Central Excise, Chennai vide common impugned Order-in-Appeal Nos. 697 and 698/2018 (CTA- II) dated 28.12.2018. Aggrieved, the assessee has preferred the above appeals.
3. When the matter was called out on the date of hearing, Shri. S. Ramachandran, Ld. Consultant appearing for the assessee, reiterating the arguments advanced before the lower authorities, also contended as under :
(i) The authorities below did not consider the explanation of the assessee in their respective orders;
(ii) During the period in dispute, G.S.T. was introduced and hence, it was the migration/transition by the introduction of which filing of Service Tax return was done away with;
(iii) The condition at paragraph 2(h) of Notification No. 27/2012 (supra) was applicable only during the period prior to the G.S.T. regime since G.S.T. has done away with the filing of ST-3 return;3
(iv) The appellant had debited the refund claimed from its CENVAT Credit account, which was thereafter transferred to 'Refund Receivable Account' and that the above was sufficient compliance of the condition at paragraph 2(h) of the Notification, which fact was also acknowledged in the Show Cause Notices itself;
(v) The appellant had satisfied the requirement prescribed by the G.S.T. regime vide second proviso to Section 142 (3) of the C.G.S.T. Act, 2017;
(vi) In respect of both the appeals, the Ld. Consultant points out that there was no proposal in both the Show Cause Notices as far as rejection of refund is concerned and therefore, the Adjudicating Authority had travelled beyond the Show Cause Notices;
(vii) Without prejudice to the above, the rejection was made on a wrong assumption that same amount was not debited in the ST-3 return and that therefore, the same was hit by paragraph 2 (h) of the Notification;
(viii) Contrary to the above, the appellant had in fact debited the same amount in the CENVAT Credit Account in its Books and that the same was not even transferred to TRAN-1 under G.S.T. regime, which fact was conveniently ignored by the authorities below;
(ix) By the above, the appellant satisfied the condition at paragraph 2 (h) by debiting the same amount and it is not the language of the statute that the debit should be from ST-3 alone, as held by the authorities below;
(x) The Revenue itself acknowledges the non-
transferring into TRAN-1, which is evident from paragraph 7 (iv) of the Show Cause Notices;
4(xi) Over and above the other allegations of the Revenue, the appellant had also executed an indemnity bond, as required by the Adjudicating Authority, to vouch that there were no multiple claims of refund;
(xii) Ld. Consultant also furnished a copy of the Order-
in-Original No. 08/2019 (R) dated 31.01.2019, which is for a subsequent period, wherein under similar circumstances the Adjudicating Authority himself had sanctioned the refund by taking cognizance of a similar debit made by the assessee in its Books of Account;
(xiii) In respect of a second Order-in-Original No. 109/2018 (R) dated 30.08.2018, the Adjudicating Authority has wrongly taken the Foreign Exchange realization and therefore, the consequential refund worked out by him was incorrect. By the above, the Adjudicating Authority has only adopted a wrong export turnover;
(xiv) As submitted earlier, even there was no proposal of rejection of refund in the Show Cause Notices issued;
4. Per contra, Shri. K. Veerabhadra Reddy, Ld. AR appearing for the Revenue, opposing the contentions of the Ld. Consultant, however supported the findings of the lower authorities. He contended that the condition at paragraph 2(h) is a mandatory one and by non-fulfilment of the same, the appellant would become ineligible for claiming the refund. He also relied on the decision of the Hon'ble Supreme Court in the case of M/s. Eagle Flask Industries Ltd. Vs. Commissioner of C.Ex., Pune reported in 2004 (171) E.L.T. 296 (S.C.).
56. I have considered the rival contentions and have gone through the relevant provisions of law and also the various orders referred to during the course of arguments.
7.1 I find that I had an occasion to deal with an identical matter in the case of M/s. Global Analytics India Pvt. Ltd. Vs. The Commissioner of G.S.T. & Central Excise in Service Tax Appeal No. 42172 of 2018 & anor. dated 27.06.2019 and the relevant findings as per Final Order Nos. 40942-40943/2019 dated 22.07.2019 read as under :
"7.1 It is an undisputed fact that the appellant did not reverse the equal amount as required by the condition at paragraph 2(h) of Notification No. 27/2012 (supra). But the fact also remains that there was no provision in the ACES system to debit the value of refund and also the fact that the entire credit which was carried forward in TRAN-1 stood reversed by the appellant voluntarily in its GSTR-3B filed for the month of April 2018.
7.2 The above facts, according to me, are sufficient compliances with the condition at paragraph 2(h) since post G.S.T., the scenario is different than the one prevailing prior to G.S.T. regime. Otherwise, it would become an impossible task for an assessee, more so when the filing of ST-3 returns itself was done away with.
8. I also note that the Board has clarified the above position in its Circular No. 58/32/2018-G.S.T. (supra) and I also note that more or less the same view is expressed in all the orders relied on by the Ld. Advocate for the appellant."
7.2 Following the above ratio, I am of the view that the impugned order cannot sustain.
7.3 In addition to the above, I also find the assertion of the Ld. Consultant for the appellant to be true as regards the proposals in the Show Cause Notices as to the rejection of refund, which is not there. Hence, the Adjudicating Authority has clearly travelled beyond the Show Cause Notice, for which reason also the rejection of refund cannot sustain. Moreover, the Revenue has 6 granted refund on the very same set of facts, that too, for a later year, which is also a fact on record.
8. Considering all the above facts, the impugned orders are set aside and the appeals stand allowed with consequential benefits, if any, as per law.
(Order pronounced in the open court on 25.07.2019) (P. DINESHA) MEMBER (JUDICIAL) Sdd