Custom, Excise & Service Tax Tribunal
M/S Hyderabad Power Installations Pvt ... vs Cce, C&St, Hyderabad-Ii on 29 June, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Division Bench Court I Appeal No. ST/2240/2012 (Arising out of Order-in-Appeal No. 56/2012 (H-II) S.Tax dt. 16.05.2012 passed by Commissioner (Appeals-II)) For approval and signature: Honble Ms. Sulekha Beevi, C.S., Member (Judicial) Honble Sh. Madhu Mohan Damodhar, Member(Technical) 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 Hyderabad Power Installations Pvt Ltd ..Appellant(s) Vs. CCE, C&ST, Hyderabad-II ..Respondent(s)
Appearance Shri R. Raghavendra, Authorised Representative for the Appellant.
Shri Prabhu Das Puli, Joint Commissioner (AR) for the Respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member (Judicial) Honble Sh. Madhu Mohan Damodhar, Member(Technical) Date of Hearing: 23.05.2016 Date of Decision: FINAL ORDER No._______________________ [Order per: Madhu Mohan Damodhar] The facts of the case are that the appellant filed a refund claim for Rs. 61,81,771/- on 11.07.2011 being the amount paid by them towards service tax under ECIS for the period 2009-10 and 2010-11; the refund was claimed under notification no. 45/2010-ST dated 20.07.2010. The said notification had been issued under Section 11C of The Central Excise Act, 1944 notifying that service tax payable on all taxable services relating to Transmission and Distribution of Electricity provided by a service provider to a service receiver during the period 26.02.2010 to 21.06.2010 for all taxable services relating to Transmissions & Distribution of Electricity shall not be required to be paid. The following amounts paid by appellant was claimed as refund by them:
Amount (Rs.) Paid on 1,98,424 1,10,305 46,425 29.09.2009 56,806 05.12.2009 1,08,689 04.01.2010 3,056 26,132 01.03.2010 1,31,934 29.03.2010 (Challan produced at adjudication stage) 5,00,000 08.01.2011 5,00,000 17.01.2011 Total : 16,81,771
2. The refund sanctioning authority held that the refund claim is filed on 11.07.2011 which is after lapse of six months from issue of notification and hence is hit by time bar. Another ground for denying the refund was that the Notification No. 45/2010-ST is not applicable to appellant since they are engaged in ECIS and not in Transmission/Distribution of electricity. On first appeal, the Commissioner (Appeals) upheld the rejection of refund. Hence the appellant is now before us.
3. The main contention raised on behalf of the appellant is that the refund claim was rejected on two grounds. Regarding the first ground of rejection that refund is hit by limitation 11C (2) since not filed in six months from the dated of notification, they contend that the limitation will only start from the date of favorable judgment as per Section 11B (5)(B)(ec). Regarding the second ground of rejection, that they were not eligible for notification no. 45/2010 ST; they contend that this issue is settled in a number of decisions.
4. The Learned AR, reiterated the findings in the impugned order and submitted that the refund is hit by limitation. He contended that Section 11C clearly lays down that the claim has to be filed within six months of the date of notification.
5. We have heard both sides and gone through the records of the case.
6. We find that the contentions of the appellant are not without merits. In the first place itself, we find from the records that the issue of taxability of services provided by service providers such as the appellant in categories like Erection Commissioning or Installation Services was in dispute and the department had contended that such services will not fall under the beneficial ambit of notification nos.11/2010-ST dated 27.02.2010 and 32/2010-ST dated 22.06.2010. The relevant portions of these notifications are reproduced below:
In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable service provided to any person, by any other person for transmission of electricity, from the whole of service tax leviable thereon under section 66 of the said Finance Act.
In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the said Finance Act), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable service provided to any person, by a distribution licencee, a distribution franchisee, or any other person by whatever name called, authorized to distribute power under the Electricity Act, 2003 (36 of 2003), for distribution of electricity, from the whole of service tax leviable thereon under section 66 of the said Finance Act.
7. The aforesaid dispute resulted in a number of show cause notices demanding service tax on such services provided related to Distribution/Transmission of electricity. We find that show cause notice O.R 35/2011-ADJN. ST(Commissioner) (HQ POR No.01/2011-STATE 1) dated 21.01.2011 was inaddition to this very appellant assessee for non-payment of service tax under the category ECIS etc., as the department harboured a view that services rendered by the appellant with Power Distribution/Transmission Companies were not eligible for exemption under notification no.45/2010-ST, reference of which has been made in SCN dated 30.12.2011 related to the present appeal.
8. Subsequently, however the Government has issued a Notification No. 45/2010-ST dated 20.07.2010 the relevant portion of which is reproduced below:
Whereas, as Central Government is satisfied that a practice was generally prevalent regarding levy of service (including non-levy thereof), under section 66 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act), on all taxable services relating to transmission and distribution of electricity provided by a person (hereinafter called the service provider) to any other person (hereinafter called the service receiver), and that all such services were liable to service tax under the said Finance Act, which were not being levied according to the said practice during the peiod up to 26th day of February, 2010 for all services relating to transmission of electricity, and the period up to 21st day of June, 2010 for all taxable services relating to distribution of electricity.
Now, therefore, in exercise of the powers conferred by section 11C of the Central Excise Act, 1944 (1 of 1944), read with section 83 of the said Finance Act, the Central Government hereby directs that the service tax payable on said taxable services relating to transmission and distribution of electricity provided by the service provider to the service receiver, which was not being levied in accordance with the said practice, shall not be required to be paid in respect of the said taxable services relating to transmission and distribution of electricity during the aforesaid period.
9. It is thus seen that the subsequent notification clearly stated that no service tax was required to be paid on all taxable services provided by service provider to service receiver during the period up to 26.02.2010 for all services relating to transmission of electricity, and during the period up to 21.06.2010 for all taxable services relating to distribution of electricity.
10. We find that the issue of eligibility of No. 45/2010-ST in identical situation is no longer res integra and has been decided in favour of service providers such as the appellant, in a number of cases. In fact relying upon such case laws, in the appellants own appeal, this Bench has set aside the aforesaid demand made against them by denial of notification No. 45/2010-ST vide Final Order No. A/30489/2016 dated 23.05.2016. The relevant portion of the order is reproduced below:
The appellant is registered with the Service Tax Department. On verification of records it emerged that the appellant had entered into contract agreements with Power Distribution/Transmission Companies which involved supply of material, erection and installation of sub-stations, related lines, installation of transformers and other electrical equipments etc. They also provided their land under lease agreement to a business organisation and received payment to that effect. The department entertained the view that the appellant has provided taxable services under the category of Erection Commissioning or Installation Services (ECIS) and Renting of Immovable Property Services, however, have neither disclosed these facts to the Department nor discharged appropriate service tax liability thereon.
2. In adjudication proceedings, service tax demand of Rs. 60,68,455/- was confirmed on services rendered under the category of ECI Services. Demand of Rs. 4,91,145/- was confirmed on services rendered under the category of Renting of Immovable Property. Hence this appeal.
3. The learned Counsel appearing for the appellant Shri R. Raghvendra Rao submitted that the challenge in this appeal is now limited to the demand, interest, penalty etc, confirmed under ECIS. He pointed out that the issue is no longer res integra as the same is settled in the following cases:
* Shri Ganesh Enterprises Vs CCE, Hyderabad-III [2014-TIOL-187-CESTAT-BANG] * K. Shanmugavelu Vs CCE, Mudurai [2014-TIOL-1325-CESTAT-MAD] * Kedar Construction Vs CCE, Kolhapur [2015 (37) S.T.R. 631 (Tri-Mumbai] * UP Rajkiya Nirman Nigam Ltd Vs CCE, Meerut [2015-TIOL-1485-CESTAT-DEL] * Elmech Enterprises Vs CCE, Hyderabad-III * [2015-TIOL-459-CESTAT-BANG]
4. We find that the appeal before us is more than amply covered by the above judgments. The relevant portion of the judgment in Elmech Enterprises case is reproduced below:
5. The Notification No. 45/2010-ST provides exemption to all taxable services relating to transmission and distribution of electricity by a person to another person during the relevant period covered by the proceedings. It is not limited only to taxable service of transmission by the transmission company as observed by the learned original adjudicating authority. Prima facie, I find that appellant is eligible for the benefit of Notification and therefore the appeal could have been heard without insisting on pre-deposit. Accordingly, the impugned order is set aside and the matter is remanded to the Commissioner (A) with a request to hear the appeal without insisting on any pre-deposit.
5. Similar view has been accorded in the other cited judgments also. Applying the dictum laid in the above judgments we find that the demand raised under ECIS is unsustainable and requires to be set aside which we hereby do. We do not interfere with the demand in regard to renting of Immovable Property. The appeal partly allowed with consequential reliefs, if any.
11. In the circumstances, we therefore find that the main issue per se was in agitation/subjudice in respect of this appellant at least till the date of Tribunals afore cited Final Order viz; 23.05.2016. In the normal course, pursuant to issue of a notification under Section 11 (C) of Central Excise Act, 1944 Section 83 of Finance Act 1994, any refund arising on account of such section 11 (C) notification will have to be necessarily claimed before the expiry of six months from the date of issue of the said notification [Proviso to subsection (2) of Sec.11 (C)]. This is a deviation from the normal period of one year provided for in claim of refund in Sec.11 (B) ibid. However, as per clause (ec) of Explanation (B) of sub section (5) of Section 11 (B) ibid read with subsection (1) thereof, in case where a duty becomes refundable as a consequence of judgment , decree, order or direction of appellate authority, Appellate Tribunal or any court, the refund claim can be made before the expiry of one year from the date of such judgment decree or direction. The statutory interpretation in such a situation, as distilled from settled law, is that when there are in an enactment two provisions which cannot be reconciled, they should be so interpreted that if possible, effect should be given to both. This is what is called as harmonious construction. Only if this is not possible as observed by the Honble Apex Court in South India Corporation (P) ltd Vs Board of Revenue, Trivandrum [AIR 1964 SC 207 at page 215]. A familiar approach in all such cases is to find out which of the two apparently conflicting provisions is more general and which is more specific and to construe the more general one as to exclude the more specific. This principle is expressed in the maxims Generalia specialibus non derogent and Generalia specalia derogent which means that general things will not derogate from the special provisions and is invoked to determine the scope of a general enactment with reference to a special enactment which precedes it.
12. We find that both the apparently conflicting provisions in section 11(B) vis-a-vis 11 (C) ibid, with regard to time limit prescribed to file refund claim are in fact harmonious with each other. Each has its own place, purpose and intention in the statute. The time limit of six months provided in Section 11 (C) will normally be applicable in respect of refund claims emanating out of notifications issued under that section. However, if the issue involved in such 11 (C) notification is also subjudice in any Court etc., the said provision of Section 11 (C) will stand eclipsed by the general provision of Section 11 (B). The general provision of S 11 B 5 (ec) will then take precedence over the special provision in S 11 C ibid. In such a case, by implication the refund claimant will legally become entitled to file the claim within a time limit of one year from the date of judgment, decree, order or direction of appellate authority, Tribunal or Court in view of clause (ec) of explanation B of S 11 B (5) ibid.
13. In the circumstances, we are of the considered opinion that the limitation can therefore start clicking only from the date of final judgment /decree/decision of Court/Tribunal/Appellate Authority. In this case therefore the limitation period will only start, at the earliest, after 23.05.2016 i.e. date of Final Order No. A/30489/2016 stated above.
14. For the reasons discussed above, we find that the refund is not hit by infirmities of time bar and cannot also be rejected on the ground that the Notification No. 45/2010-ST is not applicable to the appellant . We therefore essentially hold that the appellant is eligible for refund. The rejection of refund being unsustainable, the same is set aside and the appeal is allowed with consequential reliefs, if any.
(Pronounced on..in open court)
(MADHU MOHAN DAMODHAR) (SULEKHA BEEVI C.S.)
MEMBER (TECHNICAL) MEMBER (JUDICIAL)
Jaya.
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