Custom, Excise & Service Tax Tribunal
M/S Indian Farmer Fertiliser ... vs Cce, Meerut-Ii on 5 December, 2013
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No.2, R. K. Puram, New Delhi, Court No. 1 Date of hearing/decision: 05.12.2013 For Approval and Signature: Honble Mr. Justice G. Raghuram, President Honble Mr. Rakesh Kumar, 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? Service Tax Appeal No. 2589 of 2012 (Arising out of order-in-appeal No. 92/CE/MRT-II/2012 dated 16.04.2012 passed by the Commissioner (Appeals), Customs and Central Excise, Meerut-II). M/s Indian Farmer Fertiliser Cooperative Ltd. Appellant Vs. CCE, Meerut-II Respondent
Appearance: Sh. Prashant Shukla, Advocate for the appellant Shri Amresh Jain, DR for the Respondent Coram: Honble Mr. Justice G. Raghuram, President Honble Mr. Rakesh Kumar, Technical Member Final Order No. 58483/ 2013 Per: Justice G. Raghuram:
Heard the learned Counsel for the appellant-assessee and ld. DR for the respondent- Revenue.
2. The appellant is a cooperative society. It filed an application for refund of service tax of Rs.16,99,714/-, under Section 11B of the Central Excise Act, 1944, a provision applicable for claiming refund of service tax remitted under the provisions of the Finance Act, 1994, as well.
3. The appellant was supplied natural gas through pipeline, by M/s Reliance Gas Transportation Infrastructure Ltd. (RGTIL). This supply was a taxable service under the provisions of the 1994 Act. The transmission charges payable to RGTIL was subject to an approval by the statutory authority, the Petroleum & Natural Gas Regulatory Board. The taxable service under Section 65(105)(zzz) of the 1994 Act was provided by RGTIL to the appellant during April 2009 to May 2010. RGTIL raised invoices on the appellant on the basis of the initial tariff notified by the Statutory Regulatory body. By an order dated 09.06.2010, the Regulatory body provisionally approved the initial tariff with retrospective effect and this resulted in a downward revision of the tariff. As a consequence RGTIL had collected excess charges from the appellant for the supply of natural gas. The difference was credited by RGTIL to the account of the appellant by raising credit notes. RGTIL had remitted service tax on the initial tariff collected by it. Since the tariff was eventually determined by the Regulatory body at a rate lower than the initial rate collected by RGTIL, RGTIL advised the appellant to apply for refund of the proportionate excess service tax remitted (by RGTIL and borne by the appellant), on the taxable transport of goods other than water through pipeline and other conduit service. Consequently the appellant applied for refund.
4. The appellant initially applied for refund to the service tax authorities at Navi Mumbai. By the order dated 05.04.2011, the Assistant Commissioner, Service Tax Division-V rejected the refund claim on the ground that the application for refund should be made before the Commissionerate within whose jurisdiction the applicant operates, on the principle that the person who has borne the incidence of duty was required to file a refund claim, before its jurisdictional officer.
5. Thereafter the claim for refund application was preferred before the Assistant Commissioner, Bareilly. By the order dated 23.12.2011 the Assistant Commissioner, Bareilly sanctioned the refund as sought. Revenue preferred an appeal which was allowed by the Commissioner (Appeals), Meerut by the impugned order dated 16.04.2012. The appellate Commissioner reversed the order of the adjudicating authority on the singular ground that the refund claim was filed by the recipient of the service and not the provider M/s RGTIL; and that the word any person in Section 11B of the 1944 Act does not include the recipient of a service, on whom the burden of remittance of service tax does not fall under the provisions of the Act. The decision of the Supreme Court in Mafatlal Industries Ltd. vs. Union of India 1997 (89) ELT 247 (SC), relied upon by the appellant to support its claim for refund was brushed aside by the appellate authority by simply observing that the facts and circumstances of the Mafatlal case were different from the facts and circumstances presented by the appellant.
6. The Constitution Bench in Mafatlal Industries at paragraph 90 and in the summary of its conclusions in paragraph 99 (xii) clearly spelt out the scope of Section 11B of the 1944 Act and ruled that Section 11B does provide for a purchaser presenting a claim for refund, provided he is able to establish that he has not passed on the burden to another person. In VST Precision Components Ltd. vs. CCE, Bangalore-II 2003 (157) ELT 493 (Tri. Bang.), this Tribunal referred to the decision of Ferrous Engineering v. Collector 1998 (100) ELT 494 (Tribunal) to hold that a customer is also entitled for refund.
7. Consequently the appellant herein who is a recipient of the taxable service provided by the RGTIL and had borne the burden of service tax is entitled to claim refund, consequent on the downward revision of the charges payable by the appellant to RGTIL in terms of the determination of the appropriate rate of charge, by the Regulatory Board, and the excess quantum of Service Tax remitted as a consequence.
8. We find that the order of the Commissioner (Appeals), in brushing aside the contention of the petitioner to support its claim for refund by reference to the law declared by the Constitution Bench in Mafatlal Industries, is perverse and in total non-application of mind. The ld. Commissioner (Appeals) distinguished the clearly applicable law declared in Mafatlal Industries, as to the scope of Section 11B of the 1944 Act, without any analysis whatsoever of either the facts, the circumstances or the ratio of the judgment of the Constitution Bench. We are constrained to record our strong disapproval of such irrelevant and inappropriate conduct of statutory authorities, particularly when exercising quasi-judicial jurisdiction, in disregarding the clearly declared law, which is a binding precedent, in particular in the context of Article 141 of the Constitution. As a consequence of such vagrant analysis by the ld. Commissioner (Appeals), the appellant herein has been put to avoidable litigative trauma in preferring this appeal to this Tribunal and an unwarranted appellate burden as well.
9. In the circumstances above, we allow the appeal, quash the order dated 16.04.2012 in order-in-appeal No. 92/CE/MRT-II/2012 passed by the Commissioner (Appeals), Customs & Central Excise, Meerut-II, with costs of Rs. 1,000/- payable to the appellant.
Justice G. Raghuram President Rakesh Kumar Technical Member Pant