Custom, Excise & Service Tax Tribunal
M/S. Usv Limited vs Commissioner Of Service Tax, Mumbai-Ii on 12 April, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. Appeal No. ST/85372/2016 (Arising out of Order-in-Appeal No. MUM-II-STAX-000-APP-37-15-16 dt. 30.11.2015 passed by the Commissioner (Appeals), Service Tax, Mumbai-II) For approval and signature: Honble Shri Ramesh Nair, 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 should be released under Rule 27 of the : No
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
======================================================
M/s. USV Limited
:
Appellant
VS
Commissioner of Service Tax, Mumbai-II
:
Respondent
Appearance
Shri M.P. Baxi, Advocate for Appellant
Shri B.Kumar Iyer, Supdt. (A.R) for respondent
CORAM:
Honble Shri Ramesh Nair, Member (Judicial)
Date of hearing : 12/04/2016
Date of decision: 12/04/2016
ORDER NO.
Per : Ramesh Nair
The appeal is directed against Order-in-Appeal No. MUM-II-STAX-000-APP-37-15-16 dt. 30.11.2015 passed by Commissioner (Appeals) Service Tax-II, Mumbai whereby the Ld. Commissioner (Appeals) upholding the Order-in-Original No. ST/DIV-V/R-165/AAA/10-11 dt. 4.2.2011 rejected the appeal filed by the appellant.
2. The issue arising out of the Order-in-Appeal is that in a case where appellant deposited the amount of service tax as per the objection raised by the audit officer and subsequently issued a show cause notice demanding the service tax including the amount deposited by the appellant whether the time period of claiming refund of such amount shall be reckoned from the date of deposit of the service tax or from the adjudication order whereby the demand of service tax was dropped.
3. Shri M.P. Baxi, Ld. Counsel for the appellant submits that the appellants refund is not in respect of service tax paid by mistake on the part of the appellant but the amount of service tax was paid as per the views taken by the audit officer. Subsequently, show cause notice was issued and demand of service tax has been settled by passing adjudication order therefore the refund arises only after adjudication of the show cause notice. He submits that it is a settled position that refund if any arises against the pre-deposit made during the proceedings shall be refundable as outcome of the adjudication of such demand. Therefore the relevant date in this case for the purpose of refund under Section 11B is the date of the adjudication order on the demand case and not from the date of deposit of service tax. He further submits that the amount deposited during investigation is treated as pre-deposit and the same become refundable as and when the case of demand of service tax is finalized. Therefore the date of deposit is not relevant date in terms of Section 11B of the Act. In support of his argument he relied upon the following judgments.
(i) Lorenzo Bestonso Vs. Commissioner of Cus. (Import), Nhava Sheva 2015 (315) ELT 478 (Tri. Mumbai)
(ii) Opel Alloys Pvt. Ltd. Vs. Commissioner of C.Ex.Ghaziabad 2010 (249) E.L.T. 408 (Tri.Del.)
(iii) Commissioner of Central Excise, Chennai Vs. Hindustan Motors Ltd.
2009 (245) ELT 304 (Tri.-Chennai)
(iv) Commr. of Cus., Bangalore Vs. Motorola India Pvt. Ltd.
2006 (206) ELT 370 (Tri. Bang.)
(v) Commissioner of Central Excise Vs. Ucal Fuel Systems Ltd.
2014 (306) ELT 26 Mad.
(vi) Nissan Copper Ltd. Vs. Commissioner of Central Excise, & S.T. Vapi 2015 (329) ELT 843 (Tri.-Ahmd.)
(vii) Mahesshraj Chemicals Pvt. Ltd. Vs. Commissioner of C.Ex. Ahmedabad 2015 (317) 366 (Tri.-Ahmd.)
4. On the other hand, Shri B.Kumar Iyer. Ld. Superintendent (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that as per Section 11B of the Act, the provision in regard to limitation for filing appeal, under any circumstances refund should be filed within one year from the date of deposit of the service tax. Since the refund was admittedly filed after 1 year from the date of deposit of service tax, the lower authorities have rightly denied the refund on the ground of time bar. He further submits that if the Bench inclined to allow the appeal on limitation the matter should be remanded to the original authority to examine the issue of unjust enrichment which has not been gone into by both the authorities below.
5. I have carefully considered the submissions made by both the sides. Admittedly the service tax was paid on persuance by the audit officer in respect of overseas service under reverse charge mechanism. The dispute on the issue of taxability on such service was common in all over India and various litigation was going on in various forums. In the present case also the appellant was issued show cause notice for demanding the service tax on the overseas service under reverse charge mechanism for the period prior to 18.4.2006. Finally the issue has been resolved in the case of Indian National Shipowners Association Vs. Union of India 2008 TIOL-633-HC-MUM-ST. Accordingly, the demand raised in the show cause notice was dropped by the adjudicating authority. In the given fact the service tax paid by the appellant is treated as pre-deposit. In case, if any amount deposited during the proceedings of the demand case, refund shall arise only when the demand case is finally decided in favour of the assessee. In this case, though the appellant filed refund claim prior to the dropping of demand but the refund arise from the date of adjudication order by which the demand was dropped. Therefore in any case the date of deposit of service tax cannot be taken as relevant date in terms of Section 11B of the Act. The judgments relied upon by the Ld. Counsel are applicable as in those judgment it has been held that the refund of any amount deposited during the investigation and proceedings the limitation of 1 year from the date of deposit shall not apply. In the present case also the refund is not hit by limitation. However the adjudicating authority as well as the first appellate authority have not examine the issue of unjust enrichment, therefore the matter needs to be remanded to the adjudicating authority only for the purpose of verifying the facts whether the incidence of the refund amount has been passed on to any other person or otherwise. Refund cannot be rejected on time bar. The appeal is allowed by way of remand to the adjudicating authority in the above terms.
(Pronounced in court) (Ramesh Nair) Member (Judicial) SM.
5Appeal No. ST/85372/2016