Custom, Excise & Service Tax Tribunal
Vodafone Essar South Limited vs Cce, Bangalore(Adjn) on 2 December, 2013
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order No .27047 / 2013 Appeal(s) Involved: ST/77/2009-SM [Arising out of Order in Appeal 286-2008 dated 24/10/2008 passed by CCE (Appeals-II), Bangalore. VODAFONE ESSAR SOUTH LIMITED MARUTI INFOTECH CENTRE, 11/1, 12/1, KORAMANGLA INTERMEDIATE RING ROAD, AMAR JYOTI LAYOUT. Appellant(s) Versus CCE, BANGALORE(ADJN) Respondent(s)
Appearance:
Shri I.S. Karthikeyan and Ms. Pallavi, Advocates For the Appellant Shri A.K. Nigam, Addl. Commissioner(AR) For the Respondent CORAM: Honble Shri B.S.V. Murthy, Technical Member Date of Hearing: 02/12/2013 Date of Decision: 02/12/2013 Order Per : B.S.V. Murthy The appellant is a telecom service provider. During the period 19/04/2006 to 20/06/2006, the appellant had paid service tax of Rs.37, 33,378/- under the category of telephone service. This service tax was paid on services provided to a foreign telecom operator to enable the subscribers of the said foreign telecom operator to avail international inbound roaming facility. Subsequently, Notification No.36/2007-ST was issued on 15/06/2007 under Section 11C of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994. According to this Notification, as a practice, service tax was not being levied on such international roaming charges collected and wherever such taxes were not paid, the same shall not be collected. After the notification was issued, the appellants filed a refund claim for the service tax paid by them on 26/11/2007. The refund claim was rejected on the ground that according to the notification only service tax which was not collected or levied, need not be collected or levied and therefore where it has been collected or paid by a service provider there is no provision for refund of the same. Besides this, a view has also been taken that the appellants have not crossed the bar of unjust enrichment.
2. The learned counsel for the appellants submits that there is no dispute as to the fact that the appellant was not liable to pay during the relevant period as per Notification No.36/2007. He submits that on 20/06/2006 appellant took a decision to charge service tax to the customers and pay it to the Government and from 21/06/2006, service tax was collected and paid to the Government and no refund claim was filed in respect of such payments by the appellants. While they took a decision in respect of future liability, the appellants also took a decision that from 19/04/2006 they would discharge the service tax liability and accordingly on their own, they calculated the liability treating the amount received by them as cum-tax receipts and paid the service tax. This is the amount which has been claimed as refund after the notification issued in 2007.
3. First of all, I find that both the lower authorities have not considered the provisions of Section 11C (2) at all. They have gone by the words used in the Notification No.36/2007 which reads as under:-
International in-bound roaming Exemption from Service tax to roaming service for the period from 1-7-1994 to 14-1-2007 Whereas, the Central Government is satisfied that a practice was generally prevalent regarding levy of service tax (including non-levy thereof), under section 66 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act), on roaming service provided to an international in-bound roaming subscriber, by a telegraph authority, and that such services being a taxable service were liable to service tax under sub-clause (b) of clause (105) of section 65 of the Finance Act, which was not being levied according to the said practice during the period commencing from the 1st day of July, 1994 and ending with the 14th day of January, 2007;
Now, therefore, in exercise of the powers conferred by section 11C of the Central Excise Act, 1944 (1 of 1944) read with section 83 of the Finance Act, the Central government hereby directs that the service tax payable on roaming services provided by a telegraph authority to an international in-bound roaming subscriber, which was not being levied in accordance with the said practice, shall not be required to be paid in respect of such roaming service provided during the aforesaid period.
A plain reading of the notification alone would take us to the meaning arrived by the lower authorities and there may not be any dispute on them. The notification provides for not levying the service tax where it has not been collected prior to the period mentioned in the notification. It does not speak of any refund to be given to the persons who have paid the tax during the period in which there was a practice of not levying or not collecting the tax.
4. However, the provisions of Section 11C (2) which has been made applicable to service tax matters is relevant and to appreciate facts better, Section 11C is reproduced as under:-
SECTION 11C.?Power not to recover duty of excise not levied or short-levied as a result of general practice. (1) notwithstanding anything contained in this Act, if the Central Government is satisfied -
(a)?that a practice was, or is, generally prevalent regarding levy of duty of excise (including non-levy thereof) on any excisable goods; and
(b)?that such goods were, or are, liable -
(i)?to duty of excise, in cases where according to the said practice the duty was not, or is not being, levied, or
(ii)?to a higher amount of duty of excise than what was, or is being, levied, according to the said practice, then, the Central Government may, by notification in the Official Gazette, direct that the whole of the duty of excise payable on such goods, or as the case may be, the duty of excise in excess of that payable on such goods, but for the said practice, shall not be required to be paid in respect of the goods on which the duty of excise was not, or is not being, levied, or was, or is being, short-levied, in accordance with the said practice.
(2)?Where any notification under sub-section (1) in respect of any goods has been issued, the whole of the duty of excise paid on such goods or, as the case may be, the duty of excise paid in excess of that payable on such goods, which would not have been paid if the said notification had been in force, shall be dealt with in accordance with the provisions of sub-section (2) of section 11B :
Provided that the person claiming the refund of such duty or, as the case may be, excess duty, makes an application in this behalf to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, in the form referred to in sub-section (1) of section 11B, before the expiry of six months from the date of issue of the said notification.
Provisions of Section 11C (2) are very clear. There is no condition attached at all. Wherever a notification has been issued under Section 11C(1), persons who have paid the tax during the relevant period when there was a practice of not collecting or not levying can claim refund subject to the condition that the claim is filed within six months from the date of notification. Further Section also provides for dealing with the refund claim as per the provisions of Section 11B but for the time limit which is specified under Section 11C itself. With regard to the other aspects for examination of refund claim Section 11B is relevant. This is the sum and substance of Section 11C (2). This section has made applicable to service tax matters also. Therefore when the refund claim has been filed under Section 11C(2), ignoring the provisions of this section and considering it exclusively based on the words used in the notification is not proper and therefore in terms of Section 11C(2) made applicable to service tax matters, the appellants are eligible for the refund. At this stage, I have to deal with the submissions of the learned AR who submitted that Section 11C (2) deals with goods and not services and therefore conclusion reached by me is not correct. Very fact that Section 11C is made applicable by making a specific provision in Section 83 would show that the provisions of Section 11C have to be read by reading service in place of goods. Section 83 of Finance Act 1994 makes it clear and therefore the same is reproduced below:-
83.?Application of certain provisions of Act 1 of 1944. The provisions of the following sections of the Central Excises and Salt Act, 1944, as in force from time to time, shall apply, so far as may be, in relation to service tax as they apply in relation to a duty of excise :-
9C, 9D, 11B, 11BB, 11C, 12, 12A, 12B, 12C, 12D, 12E, 14, 14AA, 15, 33A, 35F to 35O (both inclusive), 35Q, 36, 36A, 36B, 37A, 37B, 37C, 37D, 38A and 40.
5. The next aspect is to be dealt with is unjust enrichment. From the submissions made by the learned counsel, I find that appellants have brought out clearly from 21/06/2006, they collected service tax and whatever was collected has been paid and no refund has been claimed. Prior to that period, they were not charging service tax separately and obvious conclusion would be that the service tax liability which they determined was paid from their own funds. In any case, they have also produced a Chartered Accountants certificate certifying that the service tax has not been collected. In the facts and circumstances of this case, I consider that there is no unjust enrichment.
6. In view of the above discussion, the impugned order is set aside and appeal is allowed with consequential relief, if any, to the appellant.
(Order dictated and pronounced in open court) B.S.V. MURTHY TECHNICAL MEMBER Raja.
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