Custom, Excise & Service Tax Tribunal
Hyderabad-Iv vs Infotech Entterprises on 10 August, 2023
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
HYDERABAD
REGIONAL BENCH
Service TaxAppeal No. 1474 of 2012
ST/CROSS/30209/2023
(Arising out of Order-in-Appeal No.24/2012(H-IV)ST dated 17.02.2012 passed by
Commissioner of Customs & Central Excise (Appeals-II) Hyderabd)
The Dy Commissioner of Service Tax, ....Appellant
Hyderabad-IV Commissionerate
Posnett Bhavan, Ramkoti,
Hyderabad
Verses
M/s Infotech Enterprises ...Respondent
4th Floor, A-Wing, Plot No. 11, Software Units Layout, Infocity, Madhapur, Hyderabad APPEARANCE:
Mr A. Rangadham, A.R. for the appellant Mr Prasad Paranjape Adv for the Respondent CORAM:
HON'BLE MR ANIL CHOUDHARY MEMBER(JUDICIAL) HON'BLE MR A.K. JYOTISHI, MEMBER(TECHNICAL) FINAL ORDER NO. 30213/2023 Date of Hearing: 10.08.2023 PER ANIL CHOUDHARY Heard the parties. The issue involved is whether the Commissioner (Appeals) was right in allowing the appeal by way of remand.
2. Brief facts are:
i) The Respondent is engaged, inter alia, in providing services under the category of Consulting Engineer, Information Technology.
Survey and Map Marking, Maintenance or Repair Service, Manpower Recruitment Agency, and Online Information Data under Service Tax Registration No. AAACI4487JSTOO1. Some of the said services 2 were being exported by the Respondent in accordance with Export of Services Rules, 2005 ("Export Rules").
ii) In order to export the aforesaid services, the Respondent procures various inputs and input services from its vendors and avails CENVAT Credit of the tax paid on such inputs and input services. Since the said services qualified as "export of services" under the Export Rules, the Respondent exports the services without payment of Service Tax and the credit remains unutilised in the Credit Ledger of the Respondent.
iii) Accordingly, the Respondent filed six refund claims for the refund of unutilized CENVAT Credit of a total of Rs. 4,44,60,890 in terms of Rule 5 of the CENVAT Credit Rules, 2004 ("Credit Rules") read with Notification No. 05/2006- CE (NT) dated 14.03.2006 from October 2008 to September 2009 ("relevant period").
iv) The Department issued six different show cause notices ("SCN"), seeking to reject all the refund claims filed by the Respondent. The details of the six SCNs are summarised below:
Sl Period Amount Date of SCN
No. (in Rs)
1. Oct 2008 to Dec 1,71,01,293 24.03.2010
2008
2. Jan 2009 29,90,549 12.04.2010
3. Feb 2009 22,95,243 12.04.2010
4. March 2009 38,31,271 12.04.2010
5. April2009-June 2009 93,62,349 13.07.2010
6. July 2009-Sept 2009 88,80,185 13.07.2010
Total 4,44,60890
v) In all the above SCNs, the Respondents were required to show
cause as to why their refund claim should not be rejected for being ineligible in terms of Rule 5 of Credit Rules read with Notification 3 No. 05/2006-CE (NT) dated 14.03.2006 and Export Rules and Section 11B of the Central Excise Act. 1944 ("Excise Act"). Further, it was also alleged:
(i) for the SCN listed at S. No. (1) to (3) above that the refund claims were liable to be dismissed on the ground of being time-barred.
(ii) for the SCN listed at S. No. (1) to (4) CENVAT credit was liable to be denied in terms of Rule 14 of Credit Rules.
vi) The six refund claims were thereafter withdrawn by the Respondent. Subsequently, a corrigendum to all 6 show cause notices was issued by the Deputy Commissioner of CCE, Hyderabad-IV Commissionerate vide C. No. IV/16/103/2010. S. Tax dated 05.08.2011, making the SCNs answerable to Deputy Commissioner of Central Excise, Hyderabad-M Division. In response, the Respondent filed detailed replies dated 06.05.2010 and 30.08.2010 to the show cause notices, and submitted that the show cause notices are liable to be set aside.
vii) Without considering the replies and documentary evidence(s) submitted by the Respondent, the Adjudicating Authority rejected all six refund claims vide consolidated Order-In-Original (R) No. 56/ 2011-Service Tax dated 09.09.2011 ("Order-in-Original") whereby:
(i) All six refund claims sought by the Respondent were denied for allegedly not complying with Rule 5 of Credit Rules read with Notification No. 05/2006 - CE (NT) dated 14.03.2006 and Export Rules and Section 11B of the Excise Act.
(ii) The demand of the amount of Rs. 2,62,18,356 was also confirmed against the. CENVAT Credit amount listed at S. No. (1) to (4) in the 4 table above (pertaining to the period from October 2008 to March 2009).
viii) Aggrieved by the Order-in-Original, the Respondent filed an appeal before the Commissioner (Appeals). The Department also filed an appeal against the Order-in-Original on the basis of Review Order No. 07/2011 dated 12.12.2011 on the grounds that (i) the adjudicating authority erred in not demanding interest on the disallowed - CENVAT Credit of Rs. 2,62,18,356, and (ii) that the provisions of Section 11AB of the Excise Act would apply for recovery of the demand amount with interest.
ix) Thereafter, the Commissioner (Appeals) adjudicated the Respondent's appeal and the Department's appeal vide its Order-in-
Appeal No.24/2012 (H-IV) S. Tax and No.1/2012 (H-IV) (D) S. Tax ("Impugned OIA") dated 17.02.2012. The (Impugned) OIA held that adjudication carried out was without any authority since the demands for irregular CENVAT credit under Rule 14 of Credit Rules raised in the 4 out of 6 show cause notices, were beyond the monetary limit of the adjudicating authority in terms of Circular No. 130/12/2010-ST dated 20.09.2010. Therefore, the Order-in- Original was set aside, and the matters were remanded to the adjudicating authority to examine afresh.
x) Aggrieved by the Impugned OIA, the Appellant Revenue has filed the instant appeal before this Hon'ble Tribunal on the sole ground that while exercising powers under Section 85(4) of the Finance Act, 1994 ("Act") the Commissioner (Appeals) does not have the 5 power to remand a Service Tax dispute to the Adjudicating Authority.
xi) Furthermore, the Respondent Assessee has also filed a Memorandum of Cross Objection against the Impugned OIA before this Hon'ble Tribunal on the following grounds:
(i) In the absence of any cause of action (since all 6 refund claims were withdrawn), the entire proceedings have become infructuous and as such there was no case for remand.
(ii) Having held that the demand confirmed by the lower authority was not legal for want of monetary jurisdiction, remand of the matter was unwarranted.
(iii) Demand of interest is not tenable since the demand confirmed by the lower authority is held to be without monetary jurisdiction.
3. Learned Counsel for Respondent has drawn our attention to the following judgments wherein it was held that under the provisions of Finance Act (Service Tax) The power of remand still exists and has not been specifically taken away from the Commissioner (Appeals).
1) CST Delhi Vs World Vision [2010(20)STR 49 (Tri-Del)]
2) CST Vs World Vision [2011(24)STR 650 (Del)]
3) CC, CE & ST Guntur Vs V. Rajendra Prasad [2017(1)TMI 712-CESTAT Hyderabad]
4) The Commr Vs Spandana Sphoorty Financial Ltd [2016(12)TMI 36 - CESTAT, Hyderabad].
Accordingly, following the precedent judgments of the Hon'ble High Courts and this Tribunal, we dismiss the appeal of Revenue. 6
4. We further take notice, as mentioned by the Counsel for the Respondent, that admittedly it was recorded by Commissioner (Appeals) that assessee had withdrawn their refund claims after issue of showcase notice. It is further informed that Assessee thereafter claimed the refund and it has been adjudicated, and there is no dispute in the matter anymore.
5. Cross objections are also disposed of accordingly.
(order pronounced and dictated in the open Court) (ANIL CHOUDHARY) MEMBER(JUDICIAL) (A.K. JYOTISHI) MEMBER (TECHNICAL) Neela reddy