Custom, Excise & Service Tax Tribunal
Vodafone Essar Cellular Ltd vs Pune Iii on 18 December, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
APPEAL NOS: ST/570 & 576 to 581/2011ST/33 & 509/2012
[Arising out of Orders-in-Appeal No. PIII/RS/145-152/2011 dated 24/06/2011; PIII/RS/300/2011 dated 24/10/2011 and PIII/RS/132/2012 dated 17/04/2012 passed by the Commissioner of Central Excise (Appeals), Pune.]
For approval and signature:
Honble Shri P.R. Chandrasekharan, Member (Technical)
Honble Shri Anil Choudhary, Member (Judicial)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
:
No
2.
Whether it should be released under Rule 27 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?
:
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
:
Yes
Vodafone Cellular Ltd.
Vodafone Essar Cellular Ltd.
Appellants
Vs
Commissioner of Central Excise
Pune III
Respondent
Appearance:
Shri Prasad Paranjape, Advocate for the appellant Shri S.G. Dewalwar, Addl. Commissioner (A.R.) for the respondent CORAM:
Honble Shri P.R. Chandrasekharan, Member (Technical) Honble Shri Anil Choudhary, Member (Judicial) Date of hearing: 18/12/2013 Date of decision: 18/12/2013 ORDER NO: ____________________________ Per: P.R. Chandrasekharan:
There are 9 appeals directed against Order-in-Appeal No. PIII/RS/145-152/2011 dated 24/06/2011; PIII/RS/300/2011 dated 24/10/2011 and PIII/RS/132/2012 dated 17/04/2012 passed by the Commissioner of Central Excise (Appeals) Pune.
2. Vide the impugned orders, refund claims amounting to ` 11,32,86,358/- filed by the appellant M/s. Vodafone Essar Cellular Ltd. has been rejected. These refund claims pertained to the period April 2007 to December 2010. The appellant filed rebate claims in terms of Notification No. 11/2005-ST in respect of services provided in India to international inbound roamers registered with the Foreign Telecom Network Operator but located in India at the time of providing of such services treating the supply of service as export of services under Export of Services Rules, 2005. The original authority rejected the refund claims on the ground that 7 of these claims, pertaining to Order-in-Appeal dated 24/06/2011 were time-barred inasmuch as the claim has been filed after a lapse of more than one year. The claim was also rejected on the ground that the service rendered by the appellant to international roamers is not export of services. Another ground taken for rejection was that of unjust enrichment. Aggrieved by these orders, the appellant filed an appeal before the lower appellate authority who has also upheld the order of the adjudicating authority. Aggrieved of the same the appellant is before us.
3. The learned counsel for the appellant makes the following submissions:
3.1. In appellants own case, this Tribunal vide final order No. A/503-508/13/CSTB/C-I dated 12/03/2013 held that the services provided to customers of the Foreign Telecom Service Provider as international inbound roamers while they are in India using appellants telecom network is export of service as the service is rendered to the foreign telecom service provider who is located outside India and, therefore, the same amounts to export of service under the Export of Service Rules, 2005. While coming to the said conclusion, reliance was also placed on the decision of this Tribunal in the case of Paul Merchants Limited vs. Commissioner of Central Excise 2012-TIOL-1877-CESTAT-DEL. In view of the above decisions, the appellant has a good case on merits.
3.2. As regards the argument of unjust enrichment, the transaction is one of export and, therefore, the principles of unjust enrichment would not apply to export transactions as provided for in clause (a) to proviso to sub-section (2) of Section 11B.
3.3. With regard to the time-bar aspect, the learned counsel submits that Notification 11/2005-ST does not prescribe any time-limit for presenting the export rebate claims and, therefore, the claims cannot be rejected on account of time-bar. Reliance is placed on the following decisions, namely:
(i) Dorcas Market Makers Pvt. Ltd. Vs. Commissioner of Central Excise 2012 (281) ELT 227 (Mad)
(ii) STI India Ltd. vs. Commissioner of Central Excise 2009 (236) ELT 248 (M.P.)
(iii) Commissioner of Central Excise & Customs, Surat-I vs. Swagat Synthetics 2008 (232) ELT 423 (Guj.) wherein it was held that the ratio of the decisions under the Central Excise Act will not be applicable to service tax export matters and therefore, the time-limit prescribed in Section 11B of the Act for filing of the refund claim will not apply to service tax refunds under Notification 11/2005-ST. Accordingly, it is prayed that the appeals be allowed.
4. The learned Additional Commissioner(AR) appearing for the Revenue submits that the Revenue has challenged the decision in the case of Paul Merchants Ltd. (supra) before the honble Punjab and Haryana High Court and the High Court has admitted the appeal filed by the Revenue vide STA No. 5 of 2013. Similarly, in respect of the order passed by the Tribunal in the appellants own case, Revenue has challenged the same before the honble Bombay High Court. In view of the above, it is submitted that the decisions in favour of the appellant in the above cases are in jeopardy.
4.1. As regards the issue of time-bar, it is submitted tat even though Notification 11/2005-ST does not prescribe a time-limit of one year from the date of payment of duty, the provisions of Section 11B have been made applicable to Service Tax matters vide Section 83 of the Finance Act, 1994. Therefore, it is incorrect to say that there are no time-limit applicable in respect of refund claims filed under Notification 11/2005-ST. It is also submitted that, even if the notification relating to refunds does not prescribe any time period, it is a settled law that the authority who is exercising the powers has to exercise the powers within a reasonable period and therefore, the normal period of limitation of one year has to be read into the service tax law as well. Reliance is placed on the decisions of the honble apex Court in the case of Government of India vs. Citadal Fine Pharmaceuticals 1989 (42) ELT 515 (SC); Porcelain Electrical Manufacturing Co. vs. Collector of Central Excise, New Delhi 1998 (98) ELT 583 (SC); Collector of Central Excise, Chandigarh vs. Doaba Co-operative Sugar Mills 1988 (37) ELT 478 (SC) and the honble Bombay High Court in the case of Everest Flavours Ltd. 2012 (282) ELT 481. Accordingly, it is prayed that the impugned orders are sustainable in law and the appeals deserve to be dismissed.
5. We have carefully considered the submissions made by both the sides.
5.1. As regards the merits of the case, this Tribunal in appellants own case, vide order dated 12/03/2013 has held that the activity of providing international roaming facility to inbound travelers in India is a service provided to the foreign telecom service provider who is located outside India and, therefore, transaction constitutes export of services. This decision has been rendered after considering the provisions of Export of Service Rules, 2005 and also based on the Boards Circular No.111/05/2009-ST dated 24/02/2009. Apart from the above, the ratio of the decision in the Paul Merchants Ltd. case has also been applied. Though the Punjab & Haryana High Court has admitted the appeal of the Revenue against Paul Merchant Ltd. case, no stay has been granted. Similarly, the decision in appellants own case though sought to have been challenged before the honble Bombay High Court, no stay has been obtained. Therefore, on merits, the appellant has a case and therefore, the appellant would be eligible for refund of the service tax paid on input services used in or in relation to rendering of the output service which has been exported, under Rule 5 of the Service Tax Credit Rules 2005, read with Notification 11/2005-ST. Therefore, the appellant would be eligible for the refund of service tax paid on input services.
5.2. Since the transaction is one of export, the principles of unjust enrichment would not be applicable to export transactions as specifically provided in Section 11B.
5.3. However, as regards the time-bar issue, the contention of the Revenue has merits. We notice that the provisions of Section 11B of the Central Excise Act, 1944, which deals with refund of excise duties has been made applicable to service tax vide Section 83 of the Finance Act, 1994. This would imply that the time-limit of one year from the date of payment of tax for filing of the refund claim would apply in respect of service tax refunds also. Even if it is argued that there is no specific time-limit has been set out in Notification 11/2005-ST, it is a settled position in law that though the law is silent on the time-limit applicable, a reasonable time-limit has to be read into the law. The decision of the honble apex Court in the case of Citadel Fine Pharmaceuticals and the honble Bombay High Court in the case of Everest Flavours Ltd. and other decisions of the honble apex Court relied upon by the Revenue would support this contention. Therefore, in respect of seven refund claims covered by the Order-in-Appeal dated 24/06/2011 appears to attract time-bar and only two claims covered by Order-in-Appeal dated 24/10/2011 and 17/04/2012 is not hit by the time-bar aspect. However, the lower adjudicating authority is directed to verify the date of payment of service tax in respect of seven refund claims pertaining to the period April 2007 to April 2009 and verify whether the refund claims have been filed beyond the period of one year from the date of payment of service tax and if so, the appellant would not be entitled for any refund at all. Thus, in respect of the seven claims pertaining to the period April 2007 and April 2009, the matter is remanded back to the adjudicating authority for the limited purpose of verification as to whether the claims are time-barred or not. As regards the balance two claims, the appellant is entitled for the same as time-bar issue is not attracted in these cases and the unjust enrichment principles also would not apply as the services rendered would amount to export of services.
6. The appeals are disposed of in the above terms.
(Operative Part pronounced in Court) (Anil Choudhary) Member (Judicial) (P.R. Chandrasekharan) Member (Technical) */as 2