Custom, Excise & Service Tax Tribunal
Cyient Limited vs Commissioner Of Central ... on 25 April, 2024
1 ST/30167/2020
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
HYDERABAD
~~~~~
REGIONAL BENCH - COURT NO. I
SINGLE MEMBER BENCH
Service Tax Appeal No.30167 Of 2020
[Arising out of Order-in-Appeal No.HYD-SVTAX-RRC-APP-058-19-20(APP-I) dated
19.12.2019 passed by the Commissioner of Customs and Central Tax (Appeals-I),
Hyderabad]
M/s Cyient Limited : Appellant
4th Floor, A Wing, Plot No.11,
Software Units Layouts,
Madhapur Hyderabad,
Telangana-500081
VERSUS
The Commissioner of Central Tax,
Rangareddy- GST : Respondent
Posnett Bhavan, Ramkoti, Hyderabad-500004 APPEARANCE:
Shri Rahul Bajaj and Ms. Shital Rampuria, Advocates for the Appellant Shri V.R. Pavan Kumar, Authorised Representative for the Respondent CORAM: HON'BLE Mr. P. ANJANI KUMAR, MEMBER (TECHNICAL) FINAL ORDER No. A/30291/2024 DATE OF HEARING: 29.02.2024 DATE OF DECISION: 25.04.2024 PER: P. ANJANI KUMAR The appellants, M/s Cyient Ltd., are engaged in providing services of "Consulting Engineer", "Survey and Map Making" and "Information Technology and Software Services"; the appellants export services; audit of the unit was conducted during June to October 2017,the appellants had paid an amount of service tax of Rs.13,71,280/- on Reverse Charge Mechanism in October 2018 before issuance of show-cause notice and have applied for refund of the same claiming refund under Rule 5 of
2 ST/30167/2020 CENVAT Credit Rules, 2004. The Assistant Commissioner vide OIO dated 31.07.2019 rejected the refund holding that the appellants paid service tax under the provisions of Section 68 (2) of Finance Act, 1994 and as per Section 11B, there is no provision of refund of tax which was due to the government and that in terms of Notification No.27/2012-CE (NT) only one claim is to be filed for every quarter and that the appellants have already availed refund claim in respect of 2016-17 and 2017-18. On an appeal filed by the appellants, Commissioner of Customs and Central Tax (Appeals) vide impugned order dated 19.12.2019 upheld the order of the lower authority on the grounds that there was no provision for claiming refund of service tax paid on Reverse Charge Mechanism; payment of tax and availment of CENVAT credit are different aspects; payment of tax does not confirm any right to avail credit and the tax was paid on being pointed out by the authorities. Hence, this appeal.
2. Shri Rahul Bajaj, assisted by Ms. Shital Rampuria, learned Counsels for the appellants, submits that Section 142(3) of CGST Act, 2017 provides a mechanism for refund under Section 11B of the Central Excise Act, 1944; learned Commissioner failed to appreciate that refund of any tax pertaining to the erstwhile regime should be disposed in accordance with the provisions of the erstwhile laws and any amount found eligible should be refunded in cash; learned Commissioner has not appreciated the facts of the case and the legal provisions on the refund claim filed by them under Section 11B of Central Excise Act, 1944. He submits that Tribunal has confirmed on several occasions that the refund of tax paid 3 ST/30167/2020 on Reverse Charge is available to the appellants. He relies on the following cases:
Brose India Automotive Systems Pvt. Ltd. - 2022 (62) GSTL 40 (Tri. Mumbai) Indo Tooling Pvt. Ltd. - Order No.50263/2022 (Tri. Delhi).
Terex India Pvt. Ltd. - 2022 (63) GSTL 238 (Tri. Chennai) Circor Flow Technologies India Pvt. Ltd. - 2022 (59) GSTL 63 (Tri. Chennai) NSSL Pvt. Ltd. - Order No.86639-86640/2021 (Tri. Mumbai) Banswara Syntex Ltd. - 2019 (365) ELT 773.
3. Shri Pawan Kumar, learned Authorized Representative for the Department, explains the provisions of Section 142(3) of CGST Act, 2017 and submits that the Section clearly indicates that every refund claim has to be disposed of under the provisions of existing law only; Section 142(3) does not independently provide appellant a right to claim refund of any unutilized CENVAT credit without fulfillment of conditions prescribed under existing law. He relies on the following cases:
Banswarra Syntex - 2018 (91) TMI 1064. Bosch Electrical Drive- Appeal No. ST/40010/2020 Malik Traders - 2023 (10) TMI 947- Allahabad High Court ALD Automotive Pvt. Ltd. - 2018-TIOL-385-SC-VAT and 2018 (10) TMI 814-SC Ecom Gill Coffee Trading Pvt. Ltd.
Nelco Ltd. - 2020 (36) GSTL 24 (Bom.) F.O. No. A/31159/2019 D.O.D.-23.12.2019M/s Bharat Heavy Electricals Ltd., Vs. CCE Secunderabad-GST CCE & ST-Tirupati Vs Rani Plastic Pipe Industries [2020 (6) TMI 356-CESTAT, Hyderabad] Gauri Plasticulture P. Ltd. Vs. Commr. of CCE,[2018 (360) ELT 967 (Bom.)] UOI Vs Slovak India Trading Co. Pvt. Ltd. [2008 (10) STR 101 (Kar.)] UOI Vs Slovak India Co. Pvt. Ltd. (2008 (223) ELT A170 (S.C.)]
4 ST/30167/2020 2018 (2) TMI 1264 - Delhi High Court-Cellular Operators Association of India and Ors Vs UOI CCE & ST Vs. Shree Krishna Paper Mills and Industries Ltd and Ors-2019 (12) TMI 1348-Punjab and Haryana High Court] Pradip Nanjee Gala Vs Sales Tax Officer & Others- [2015 (5) TMI 141-Supreme Court] Gurdev kaur&Ors Vs KAKI &Ors [2006 (5) TMI 505-SC] Asst. Commr of CGST and CE Cus Vs Suther Land Global Service Pvt. Ltd. [2020 (10) TMI 804 Madras High Court] D.V. Lakshmana Rao Vs State of Karnataka &Ors [2000 (11) TMI-1249-HC of Kar] F.O. No. A/30018/2023 D.O.D.-17.03.2023-M/s Tecumseh Products India Pvt Ltd Vs CCE Medchal-GST Lata Hydrocarbon Resources Pvt Ltd vs CCT, Rangareddy- GST [2019 (12) TMI 1060 CESTAT HYDERABAD] I.O. No. 40019/2021 D.O.D.-22,10.2021 M/s Bosch Electrical Drive India Pvt Ltd., Vs CCE - Chennai-GST F.O. No. 30689/2020 D.O.D.-25.02.2020-M/s Mylan Laboratories Ltd., Vs. CCE Secunderabad-GST 2014 (10) TMI 667-CESTAT, Mumbai Phoenix Industries Pvt. Ltd.; Vs. CCE, Raigad 2019 (9) TMI 16-CESTAT, Mumbai Idol Textile Ltd, Balaji Prints Ltd.; Vs. Commr. of Central Excise 2019 (30) GSTL 224 (Bom.) Gauri Plasticulture P. Ltd.; Vs. Commr. of C.Ex., Indore 2020 (10) TMI 804-Madras High Court-Asst. Commr of CGST and Central Excise and Customs, SutherLand Global Service Pvt. Ltd.
2018 (10) TMI 1064-Rajasthan High Court Banswara Syntex Ltd. Vs. CCE & ST 2022-TIOL-57-SC-GST Special Leave to Appeal No(s).32709-32710/2018
4. Heard both sides and perused the records of the case. The appellants paid service tax, on Reverse Charge Mechanism, in October 2018 after the cut-off date for transition to GST Regime. The appellants claimed the refund of the same. It is the case of the Department that payment of service tax on RCM; availment of CENVAT credit of the same and refund of unutilized credit under Rule 5 are different and are 5 ST/30167/2020 governed by different provisions of law. Learned Commissioner holds in the impugned order that:
"From a careful reading of the relevant provision cited above, it is clear that the claim for refund filed by a claimant shall be disposed of in accordance with the provisions of existing law and refund payment has to be made in cash only if any amount is eventually found to be refundable. In the facts and circumstances of the present case, there is no provision for claiming refund of CENVAT credit of service tax paid under reverse charge mechanism on input services under the provisions of CCR 2004 or Finance Act 1994 read with provisions of Section 11B of Central Excise Act 1944. First proviso to sub-rule 7 of Rule 4 of CCR 2004 only allows tax payer to claim credit of service tax paid under reverse charge mechanism (RCM). There is no provision under CCR 2004 to allow refund of any of service tax paid under RCM in case taxpayer is not in a position to take credit. There is no such provision either under the Finance Act 1994 or Section 11B of Central Excise Act 1944 relevant for claiming refund. Further, there are no notifications, order, rule or regulation made prior to 01.07.2017 which allows such refund. In short there is no provision under the "existing law" which allows such payment of refund in a situation as the present one. It is clear that the appellants have misconstrued the provisions of Section 142(3) of CGST Act, 2017. In the facts and circumstances of the case, inability of the appellants to transit the tax paid into ITC is of no relevance. It needs to be kept in mind that payment of tax under provisions of Finance Act, 1994 and availment of credit of such tax paid under the provisions of CCR 2004 are two different aspects. Payment of tax does not confer any right or entitlement to claim refund of such tax paid unless there are provisions which allow such act. In consequence, refund in question sought by the appellants under the said provisions is not admissible to the appellants."
5. On going through the records of the case, it appears that having paid the applicable service tax on being pointed out by the audit, the appellants have filed the refund claim. If the appellants are seeking refund of service tax under Section 11B of Central Excise Act, 1944, they 6 ST/30167/2020 have to satisfy the conditions of Section 11B which provides for refund of any duty. It is not clear as to why the appellants have claimed refund of duty; it is not duty which is paid in excess or under mistaken notion of law. I am of the considered opinion that any claim of refund should have some basis for claiming of the same. The claim of the appellants appears to be that they have paid service tax on Reverse Charge Mechanism; they are eligible to avail CENVAT credit of the same and as they are not in a position to avail and utilize the credit, they are seeking refund under Section 142(3)of CGST Act, 2017.
6. If it is to be considered as refund of CENVAT credit, the same is governed by CENVAT Credit Rules. The appellant's claim is that since they have exported the services, they are eligible to claim refund under Rule 5 of CENVAT Credit Rules. The Department seeks to reject the claim on the ground that CENVAT credit under Rule 5 can only be availed subject to observance of the procedure laid down under Notification No.27/2012-CE (NT) dated 18.06.2012; only one claim for refund can be lodged for one quarter and that the appellants have already availed refund of unutilized CENVAT credit for the quarter ending up to June 2017.
7. From the records of the case, it is seen that the case does not fall under the category of refund under Rule 5, as a refund claim for the relevant quarter has already been filed and availed by the appellant, the fact of which is not denied by them. I find that the appellant is attempting to compress various provisions relating to refund under 7 ST/30167/2020 Central Excise Act, 1944; CENVAT Credit Rules 2004 and CGST Act 2017. I am of the considered opinion that the provisions of law do not permit the same. It was for the appellant to pay the applicable service tax in time; to avail CENVAT credit of the same and claim refund under the provisions of Rule 5 as the appellants are engaged in export. The appellants have paid duty on being pointed out after the implementation of GST. Thus, their claim of refund of unutilized credit has no merit. As the service tax cannot be held to have been paid without sanction of law, the appellants are also not eligible for refund of service tax as such. For the aforesaid reasons, I find that the impugned OIO and OIA are legally maintainable. I find no reasons, whatsoever, to interfere with the same. I find that this Bench in the case of Rani Plastic Pipe Industries (supra) observed as follows:
"10. This is the only provision under which a refund of Cenvat credit can be allowed. Such refund is also subject to conditions notified by the Government. There is no provision In the Cenvat Credit Rules for refund of Cenvat credit if the assessee is not able to utilise it for any other purpose, such as the factory being closed. The Hon'ble High Court of Karnataka in the case of Slovak India (supra), has however allowed such refund. The SLP filed by the Revenue against this judgment has been dismissed by the Hon'ble Apex Court in view of the concessions made by the ASG. The question which arises is in such a case the dismissal by the Hon'ble Supreme Court of the SLP should be treated as a law laid down under article 141 of the Constitution or otherwise. This issue was examined by the Larger Bench of the Hon'ble High Court of Bombay which also examined whether unutilized cenvat credit can be refunded on account of the closure of manufacture activities of the factory. The Hon'ble Larger Bench has found that the law has not been laid down by the Hon'ble Apex Court and the SLP was merely dismissed on account of the concession made by the ASG. Further, the Larger Bench of Hon'ble High Court of Bombay has held that no refund can be
8 ST/30167/2020 sanctioned under Section 11B if the assessee is unable to utilize Cenvat credit on account of closure of the manufacturing activities.
11. In view of the above, we find that the ratio of the judgment of the Larger Bench of the Hon'ble High Court of Bombay is binding and prevails and accordingly no refund of MODVAT/Cenvat credit can be sanctioned to the respondent. We also find that the law has now been laid down by the constitutional bench of the Hon'ble Supreme Court in the case of Dilip Kumar and Company & Other [2018 (361) ELT 577 (SC)] and it is held that the fiscal laws must be interpreted as they are, without any intendment, regardless of the consequences. As per the ratio of this Judgment also we cannot sanction a refund against the explicit provisions. In view of the above, the appeal filed by the Revenue is allowed and the impugned order is set aside.
8. For the aforesaid reasons, I find that the cases relied upon by the appellant are not of any help as the facts of the cases are different.
9. Accordingly, the appeal is rejected.
(Order pronounced in the open court on 25.04.2024) (P. ANJANI KUMAR) MEMBER (TECHNICAL) PK