Custom, Excise & Service Tax Tribunal
M/S Sri Vishnu Cements Ltd vs The Commissioner on 24 October, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench Single Member Bench Court I Appeal No. ST/132/2007 (Arising out of Order-in-Appeal No.05/2006(H-III) ST, dated 31-10-2006 passed by Commissioner, C.CE&ST (Appeals-III)Hyderabad) For approval and signature: Honble Ms. Sulekha Beevi, C.S., 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? 2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? M/s Sri Vishnu Cements Ltd. ..Appellant(s) Vs. The Commissioner C.CE&ST,Hyderabad-I ..Respondent(s)
Appearance Shri Radhika Shriranjani, Managing Director for the Appellant.
Shri S.Chandra Bose, AR for the Respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member (Judicial) Date of Hearing: 24/10/2016 Date of Decision: 24/10/2016 FINAL ORDER No._______________________ [Order per: Sulekha Beevi, C.S.]
1. The appellant is engaged in the manufactured of cement and is having factories at various locations. The appellant paid service tax under the category of Goods Transport Operators for the period 16-11-1997 to 02-06-1998, pursuant to a letter issued by department dated 10-12-2003 requiring the appellant to pay service tax. The appellant thereafter on coming to understand that, as no show cause notice was issued to them seeking demand of the Service Tax for the period 16-11-1997 to 02-06-1998, filed an application for refund of Service Tax amount of Rs.36,18,230/- which was paid by them under protest. The refund was rejected vide Order-in-Original dated 26-07-2006. The appellant preferred an appeal before the Commissioner (Appeals) contending that they are not liable to pay Service Tax under the category of GTO during the relevant period. The Commissioner (Appeals) upheld the order of rejection passed by original authority. Hence the appellant is before the Tribunal.
2. On behalf of the appellant Ld. Counsel Ms Radhika Shriranjani, contended that the department having not issued show cause notice demanding the amount of Rs. 36,18,230/-, the appellant is not liable to make any payment under the category of GTO for the period 16-11-1997 to 02-06-1998 and therefore, the amount ought to have been refunded to the appellant. She stressed on the point that the amount was paid by appellant under protest. It was also pointed out that the adjudicating authority had rejected the refund claim without issue of any show cause notice proposing to reject the refund. She relied upon the decision laid in M/s BPL Telecom Pvt.Ltd. Vs CCE Cochin [2006-TIOL-1682-CESTAT Bang.], M/s BST Ltd Vs CCE Cochin[ 2006-TIOl-1678-CESTAT.Bang. and M/s Sri Krishna Fertilisers Ltd Vs CCE, Patna[2007-(6)STR- 401(Tri. Kol) to canvas the proposition that GTO service was brought under Service Tax net retrospectively by the amendment to Finance Act, 2000 with effect from 12-05-2000 only. The Honble Apex Court in the case of Laghu Udyog Bharati Vs UOI [2002-TIO- 162-SC-ST] had clearly laid down that retrospective amendment would come into effect and the demand can be confirmed only the if show cause notice has been issued prior to the amendment making GTO services taxable services.
3. On behalf of the department, the Ld. AR, Shri PS Reddy reiterated the findings in the impugned order. He submitted that the department had issued a letter intimating the appellant to pay service tax for the period from 16-11-1997 to 02-06-1998 and the appellant had made the payment of Service Tax. He submitted that the levy of Service tax on GTO was initially imposed on the service providers in the budget 1997. However, the said levy was transferred to receiver of service after introduction of sub clause 17 of 2(1)d of Service Tax Rules under Notification No.42/97 dated. 05-11-1997,w.e.f. 16-11-1997. Thereafter, the Notification No.49/98 dated 02-06-1998 was issued exempting the services provided by Good Transport Operators from the levy of service tax altogether. That such exemption was prospective. The Ld Counsel contended that the appellants as service recipients, are therefore liable to pay service tax for the limited period from 16-11-1997 to 02-06-1998. Therefore, the rejection of refund is legal and proper.
4. I have heard both sides.
5. The crucial punt to be considered is whether the department can retain the amount paid as service tax by the appellant under protest under the category of GTO services for the period 16-11-1997 to 02-06-1998. The appellant has paid on receiving a letter issued by department. The appellant had paid the amount under protest and later coming to know that they are not liable to pay the amount as there was no show cause notice demanding /quantifying the tax to be paid, they filed a refund application. The Honble Apex Court in the case of Laghu Udyog Bharati (Supra)which was followed the by the Tribunal in the decisions cited by the Ld. Counsel for the appellant, observed that the demand can be confirmed only if a show cause notice is issued prior to the amendment brought out to the Finance Act making the service recipient liable to pay service tax. In this case, undisputedly the department has not issued a show cause notice quantifying the amount. A letter issued to the appellant cannot take the place of a show cause notice provided under law. The Ld. Counsel for appellant submitted that a second letter was issued to the appellant demanding interest after payment of amount under protest. However, for reasons not known, department has refrained from raising a demand/issuing a show cause notice. The decision cited by the Ld. Counsel squarely covers the issue before me. In the case of BPL Telecom Ltd. The Tribunal observed as under: .
the stay application and the appeal are taken up together for the disposal as per law as the issue is covered by judgements of the Apex court and the Tribunal including the decision of this bench. The appellants have been brought under the category of Goods Transport Operators. This category was brought under the Service Tax net retrospectively under the proviso to Section 68 of the Finance Act, 2000 enacted w.e.f. 12-05-2000. the Apex court in the case of Laghu Udyog Bharati Vs UOI(112) ELT 365(SC)] =2002-TIOL-162-SC-ST has clearly laid down that retrospective amendment would come into effect and the demands can be confirmed provided the show cause notice has been issued prior to the amendment was brought to the Finance Act. The Tribunal in the case L.H. Sugar Factories Ltd Vs CCE(2004-165-ELT161(Tri.Del)=2004-TIOL-39-CESTAT-Del has clearly held that the demands cannot be confirmed if the show cause notice has not been issued prior ot the period of demand. This judgement has been confirmed by the Apex court. In the present case, the show cause notice has been issued after the amendment was brought to the Finance Act retrospectively. Therefore, it is the contention of the appellants that following ratio of the cited judgments, the demands are not sustainable. The learned counsel submits that in terms of the cited rulings including the ruling of this bench, the appeal is to be allowed along with the stay application.
6. In the case of M/s BST Ltd., Vs CCE, Cochin(supra) , the Tribunal had occasion to consider whether the confirmation of demand is sustainable, when show cause notice is issued after the amendment to the Finance Act. The Tribunal therein held that the confirmation of demand is not sustainable. In the case of M/s Sri Krishna Fertilisers Vs CCE, Patna, the Tribunal analysed the issue whether the duty paid under protest would be hit by the doctrine of unjust enrichment. In similar set of facts, where the appellant had deposited the service tax relating to the period 16-11-1997 to 01-06-1998 which was neither leviable nor realisable from the appellant and having paid under protest, it was held that the same is refundable for the period to which the amendment of Finance Act, 2000 relates to. The Tribunal therein held that the amount having been paid under protest, the amount is not hit by the bar of unjust enrichment. The relevant portion of the judgment reads as under:
8.?With the observations and findings aforesaid, it may be concluded that the appellant had deposited the service tax as receiver of service but not as service provider and the Notification No. 41/97 dated 5-11-97 as well as the Notification No. 49/98 dated. 2-6-98 having been rescinded by Notification No. 5/99 dated 28-2-99 and the tax having been paid relating to the period 16-11-97 to 1-6-98, which was neither leviable nor realizable from the appellant and having paid the tax under protest, that shall be refundable. However, to refund, the application dated 4-6-04 which was acknowledged by the Department on the same date should receive scrutiny of unjust enrichment. Only after satisfaction with the requirement of the doctrine, the authorities below may pass appropriate orders.
7. From the foregoing discussion, as the appellant has paid the Service Tax amount under protest, following the decisions above, I hold that the appellant is eligible for refund. The impugned order rejecting the refund is set aside.
8. In the result, the appeal is allowed with consequential reliefs, if any.
(Dictated & Pronounced in open court) (SULEKHA BEEVI C.S.) MEMBER(JUDICIAL) dks.
7