Custom, Excise & Service Tax Tribunal
C.C.E. & S.Tax, Bhopal vs Central Industrial Security Force on 26 November, 2015
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R.K.Puram, New Delhi COURT-I Date of hearing/decision: 26.11.2015 Service Tax Appeal No.3056 of 2012 Arising out of the order in appeal No.125/BPL/2012 dated 5.7.2012 passed by the Commissioner (Appeals) ,Customs & Central Excise, Bhopal. For approval and signature: Honble Mr. Justice G. Raghuram, President Honble Mr. R.K. Singh, Technical Member 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether their Lordships wish to see the fair copy of the Order? 4 Whether Order is to be circulated to the Departmental authorities? C.C.E. & S.Tax, Bhopal .. Appellant/Revenue Vs. Central Industrial Security Force .. Respondent
Appearance:
Present Shri K. Poddar, A.R. for the Appellant/Revenue Present Shri Z.U Alvi, Advocate for the respondent/assessee Coram: Honble Mr. Justice G.Raghuram, President Honble Mr. R.K. Singh, Technical Member Final Order No .53901/2015 Per R.K. Singh:
Revenues is in appeal against order -in -appeal dated 5.7. 2012 in terms of which refund of Rs. 39,38,678/- was allowed on the ground that the said amount of service tax was recovered from Bharat heavy electricals Ltd in terms of the provisions of section 87 (d) of the Finance Act 1994 and that the appellant was not required to pay the said amount of service tax in view of the exemption order No. 1/1/2011 dated 01/07/2001 issued by the Ministry of Finance exempting the appellant from payment of service tax for the period 16/10/1998 to 31/03/1999.
2. Revenue in its appeal has contended as under:
(a) Bharat Heavy Electricals Ltd paid part of the impugned amount from Cenvat credit which cannot be refunded in cash.
(b) The appellant was not eligible for refund as the service tax liability was not discharged by it.
(c) The principles of unjust enrichment would disentitle the appellant for the impugned refund as the burden had been passed on by the appellant to Bharat Heavy Electricals Ltd.
3. The Respondent has contended that the impugned amount was deducted by Revenue from the refunds of Bharat heavy electricals Ltd in terms of the powers under section 87 (d) of Finance Act 1994 and BHEL recovered the said amount from the appellant by deducting the same from the payments due to the appellant for providing security services. There was no question of passing on the burden to BHEL as service tax had not been paid by the appellant and was recovered from the refunds of Bharat heavy electricals Ltd. The respondent also stated that similar refund amounting to of Rs. 51,02,163/- has been paid in cash and that order has not been challenged by revenue
4. We have considered the contentions of both sides. It is a fact that the impugned amount of service tax was not paid by the appellant and therefore Revenue in exercise of its power under section 87 (d) recovered the same from the refunds of Bharat Heavy Electricals Ltd. vide Deputy Commissioner Central excise Bhopal divisions Order Nos. 13 & 14/DC/Division 1/reference/09 dated 09/02/2009. Bharat Heavy Electricals Ltd has clearly stated that the amount deducted by Revenue from its refunds was recovered by it from the respondent by adjusting the said amount from the payments due to the respondent for providing security service. It is clear that the service tax had not been paid by the respondent and therefore the same was recovered from the refunds of Bharat Heavy Electricals Ltd and therefore the question of the respondent having passed on the burden to Bharat Heavy Electricals Ltd. simply does not arise. It is also not in dispute that by virtue of the above referred exemption order issued by the Ministry of Finance the respondent was not liable to pay the said amount service tax which was recovered by adjustment from the refunds of Bharat Heavy Electricals Ltd. which in turn recovered it from the respondent. Consequently it clearly became eligible for the refund of the said amount as the burden was borne by the respondent. As regards the contention of Revenue that the refund of duty claimed by Bharat Heavy Electricals Limited was partly paid out of CENVAT credit account and therefore the respondent cannot be given the refund in cash, it is pertinent to mention that the service tax due from the appellant was adjusted from the refunds of Bharat Heavy Electricals Ltd which in turn deducted the said amount from the payments due to the appellant and therefore as far as the respondent is concerned, it did not receive an equal amount of cash from Bharat Heavy Electricals Ltd. Further Bharat Heavy Electricals Ltd pays crores of rupees of duty in cash and therefore it really is of no consequence whether the amount of refund was to be given to it by credit to its Cenvat account in cash because this issue becomes important only in those cases where the assessee does not pay any duty in cash and is able to discharge all its liabilities out of CENVAT credit.
5. In the light of the foregoing analysis, we do not find any infirmity in the impugned order. Revenues appeal is dismissed.
(Justice G. Raghuram) President (R.K.Singh) Technical Member scd/ 1