Gujarat High Court
Linde Engineering India Pvt. Ltd. vs Union Of India, on 11 September, 2018
Author: Anant S. Dave
Bench: Anant S. Dave, Biren Vaishnav
C/SCA/12626/2018 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 12626 of 2018
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LINDE ENGINEERING INDIA PVT. LTD.
Versus
UNION OF INDIA,
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Appearance:
MR MIHIR JOSHI, Senior Counsel with MR.PARTH CONTRACTOR(7150) for
the PETITIONER(s) No. 1,2
for the RESPONDENT(s) No. 1,2,3
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CORAM: HONOURABLE MR.JUSTICE ANANT S. DAVE
and
HONOURABLE MR.JUSTICE BIREN VAISHNAV
Date : 11/09/2018
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE ANANT S. DAVE)
1. Heard Mr.Mihir Joshi, learned Senior Counsel appearing for the petitioners.
2. At the outset, our attention is invited to show cause notice dated 10.11.2017 issued by respondent no.3 seeking reasons why the amount of Rs.62,51,39,050/- along with permissible interest and penalty should not be recovered from the petitioners under Rule 14 of the Cenvat Credit Rules read with proviso to Sub-section (1) of Section 73 of the Finance Act, 1994. It is submitted that paragraph 3 of the show cause notice along with paragraphs 4 and 5 vis-a-vis Cenvat Credit Rules 2004, Rule 6A of the Service Tax Rules, 1994 so referred to in paragraph 3 of the show cause notice, is to be interpreted in the backdrop of following substantial question of law:-
"i. Whether in terms of Explanation 3 to Section 65B(44) of the Act, a holding company of the Petition Page 1 of 2 C/SCA/12626/2018 ORDER No.1 being Linde AG, incorporated in Germany, or any other subsidiary of Linde AG, can be construed as 'establishments of the Petition No.1'?
ii. Whether in the facts and circumstances of the present case and on a reading of the provisions of Rule 6A of the Service Tax Rules, 1994 (hereinafter referred to as "STR") read with the provisions of Section 65B(44) of the Act, the consulting engineering services rendered outside India by the Petition No.1 to any other subsidiary of Linde AG or holding company would qualify as 'Export of Services' as contended by the Petitioner, or Exempted Service under Rule 2 (e) of the Cenvat Rules, thereby requiring proportionate reversal of Credit under Rule 6A of the STR as is contended by the Department?"
3. Accordingly, it is submitted that action of the respondent in issuing show cause notice is without jurisdiction and contrary to the provisions of Rule 6A of Sales Tax Rules read with Section 65B (44) of the Act.
4. Considering the above and upon reading the contents of the show cause notice impugned in juxtaposition to statutory provisions, we are inclined to issue NOTICE returnable on 27th September 2018. Meanwhile, there shall be ad-interim relief in terms of paragraph 9 (b) of the petition. Direct service is permitted.
(ANANT S. DAVE, J) (BIREN VAISHNAV, J) R.S. MALEK Page 2 of 2