Custom, Excise & Service Tax Tribunal
M/S Continental Engines Ltd vs Cce, Delhi I on 12 September, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. IV DATE OF HEARING : 07/09/2016. DATE OF DECISION : 12/09/2016. Service Tax Appeal No. 1857 of 2010 (SM) [Arising out of the Order-in-Appeal No. 428 (DKV) CE/JPR-I/2010 dated 13/09/2010 passed by The Commissioner (Appeals), Central Excise, Jaipur.] For Approval and signature : Honble Ms. Archana Wadhwa, Member (Judicial) 1. Whether Press Reporters may be allowed to see :No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would be released under Rule 27 of : the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair :Seen copy of the order? 4. Whether order is to be circulated to the :Yes Department Authorities? M/s Continental Engines Ltd. Appellant (Machining Division) Versus CCE, Delhi I Respondent
Appearance Shri S.C. Kamra, Advocate for the appellants.
Shri Dharam Singh, Authorized Representative (DR) for the Respondent.
CORAM : Honble Ms. Archana Wadhwa, Member (Judicial) Final Order No. 53508/2016 Dated : 12/09/2016 Per. Archana Wadhwa :-
After hearing both the sides duly represented by Shri S.C. Kamra, Advocate, the learned Counsel for the appellant and Shri Dharam Singh, the learned AR for the Revenue, I find that the appellant is engaged in the manufacture of automotive cylinder head and were paying duty on the GTA services, so availed by them, on reverse charge basis. They were also taking credit of the service tax paid by them.
2. As per Notification No. 12/2008 dated 01/3/2008, an assessee is required to pay service tax on the GTA services @ 25% of value of the freight. During the period relevant for the purpose of the present appeal, the appellant did not avail the benefit of the said notification and paid the service tax on the full value of the freight. As such they paid excess service tax to the tune of Rs. 2,10,810/- and had taken the credit of the same also.
3. Subsequently realizing that they have paid the excess service tax on the GTA services, they reversed the credit of such excess amount and claimed refund of the same from the authorities vide their refund application dated 27/2/2009.
4. The Adjudicating Authority allowed the refund claim, but credited the same in consumer welfare fund on the grounds of unjust enrichment. The said order of the lower Authorities was upheld by Commissioner (Appeals) and hence the present appeal.
5. The only ground required to be examined in the present appeal is as to whether the principle of unjust enrichment would be applicable to the refund, claimed and sanctioned. The appellants have strongly contested that the excess payment of service tax made by them, was not availed as credit and would not form a part of their final value of the product. They have drawn, attention of the authorities below to the books of accounts, balance sheets as also to the Chartered Engineer certificate showing that the amount, in question, was shown as recoverable in their balance sheet. The lower Authorities have not accepted the above stand and have held that when Chartered Engineer certificate by itself is not sufficient to show that the excess service tax paid by the appellant was not a part of the value of the appellants final product.
6. Apart from above, it is seen that the appellants also contended that being manufacturer exporter of the goods, the service tax paid on the services utilized by them for export of the goods is, in any case refundable to them under Notification No. 40/2007-ST as amended, and in terms of Rule 5 of Cenvat Credit Rules, where the question of unjust enrichment would not arise. Though the said contention of the appellants stand reproduced by Commissioner (Appeals) in his impugned order but the same does not stand adverted to and there is no finding on the same. As such, I am of the view that the matter needs to be re-examined, for which purpose I set aside the impugned order and remand the matter to original Adjudicating Authority. Needless to say that the appellant would be given an opportunity to put-forth their case to substantiate their plea that the disputed amount, in question, has not form part of the value of the final product. Their alternative plea of refund under Rule 5 readwith Notification No. 40/2007-ST would also be examined by the Adjudicating Authority. Appeal is thus allowed by way of remand.
(Order pronounced in the open court on 12/09/2016.) (Archana Wadhwa) Member (Judicial) PK ??
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