Custom, Excise & Service Tax Tribunal
M/S. Gulshan Chemicals Ltd vs C.C.E. Jaipur-I on 27 February, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI PRINCIPAL BENCH, COURT NO. II Appeal No. E/2549/2009-EX(SM) [Arising out of Order-in-Appeal No. 10/2009 (ST) dated 03.06.2009 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Jaipur-I]. Appeal No. ST/214/2009-EX(SM) [Arising out of Order-in-Appeal No. 206 (DK)ST/JPR-I/2008 dated 16.10.2008 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Jaipur-I]. For approval and signature: Honble Shri Ashok Jindal, 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 Lordships wish to see the fair copy of the Order? 4 Whether Order is to be circulated to the Departmental authorities? M/s. Gulshan Chemicals Ltd. .Appellants Vs. C.C.E. Jaipur-I .Respondent
Appearance:
Shri H. Bajaj, Advocate for the Appellants Shri A.K. Dhawan, DR for the Respondent CORAM:
Hon'ble Shri Ashok Jindal, Member (Judicial) Date of Hearing: 27.02.2015 FINAL ORDER NO. 50561-50562/2015-(SM) Per Ashok Jindal:
The appellant is in appeals against the impugned orders denying refund claim of excess service tax paid by them on goods transport agency services.
2. The facts of the case in brief are that the appellant paid Service Tax on inward goods transport agency services on the whole value of the services availed instead of 25% of the service tax as per notification no. 32/2004. Thereafter, the appellant filed refund claim of the excess Service Tax paid on transportation services i.e. 75% of the Service Tax paid by them during the period 01.01.2005-31.05.2007 on 15.06.2007. Therefore, show cause notice was issued for rejection of refund claim on the following grounds:
(i) Limitation
(ii) Unjust enrichment
3. The adjudicating authority found that appellant has passed the bar of unjust enrichment on the basis of various verifications i.e. Certificate issued by the Chartered Accountant and amount shown as receivable from the Excise Department and sanctioned certain refund claim but rejected the refund claim for Rs.8,26,637/- on the ground that same is barred by limitation. As they have filed refund claim beyond the period of one year as prescribed under section 11(B) of the Central Excise Rules, 1944, the refund claim which was denied by the Adjudicating Authority on limitation, the appellant filed the appeal before the Ld. Commissioner (A) who affirmed the adjudication order. Therefore, appellant is in appeal against this order.
4. The commissioner also reviewed the order of adjudicating authority sanctioning the refund claim of Rs.7,94,490/- and rejected their refund claim. Against that order also appellant is before me. As both the appeals are arising from a common issue, therefore, both are taken up together for disposal.
5. Ld. Counsel for the appellant submits that the appeal no. E/2549/2009 is for rejection of refund claim on account of unjust enrichment. For that he submits that the impugned order passed by the Ld. Commissioner is bad in law as adjudication order was reviewed after disposal of their appeal by Ld. Commissioner (A) on 16.10.2008 filed by the appellant before him. Therefore, said order cannot be sustainable in the eyes of law as held by Rajasthan High Court in the case of UOI Vs. Inani Carriers-2009 (13) STR 230 (Raj) and in the case of C.C.E. Vs. Shiva Builders-2011 (22) STR 513 (P&H) by the Honble High Court of P&H. On merits he submits that the adjudicating authority has considered the issue of unjust enrichment in detail by verifying the payment of Service tax has not been collected from the buyers and Service Tax has been paid to the transporters and obtained certificate from them with regard to this aspect. Further, after verification of certificate issued by the Chartered Accountant showing that the amount of refund claim has not formed part of cost of production. Moreover, same has been shown as receivable from the Excise Department. But while review took by the Ld. Commissioner has not considered this ground and in routine manner he passed the order of rejecting the refund claim. Therefore, said order is required to be set aside.
6. For appeal no. ST/00214/2009 which is against the rejection of refund claim by Commissioner (A) of Rs.8,26,637/- on the ground of limitation, he submits that the amount of Service Tax was not payable by the appellant at all in view of the notification no. 32/2004. Therefore, same cannot be termed as tax and if it is not a tax, then provision of section 11(B) of the Act are not applicable to them. To support this contention he relied on the decision of this Tribunal in the case of Sharavan Banarasilal Jejani Vs. C.C.E.-2014 (35) STR 587 (Tri-Mum) and in the case of Jubilant Enterprises Pvt. Ltd. Vs. C.C.E-2014 (35) STR 430 (Tri-Bom). In these circumstances, he prayed that impugned orders be set aside and appeals be allowed.
7. On the other hand Ld. AR submits while reviewing Ld. Commissioner (A) has examined that the amount has not shown in the Balance Sheet as receivable. Therefore, he has rejected the refund claim on ground of unjust enrichment. He further submits that all the refunds are governed by section 11(B) of the Act. Admittedly, in this case the refund claim has been filed beyond the period of one year of the payment of service tax. Therefore, same is barred by limitation.
8. I have considered the submission made by both the sides and perused the record. The rejection of refund claim by Ld. Commissioner on account of unjust enrichment, the order of review is not sustainable in the eyes of law as held by Honble High Court of Rajasthan in the case of Inani Carriers (Supra) wherein the Honble High Court has held that the superior jurisdiction was capable of reversing, modifying or affirming the order which was not issued before it and in the present case Ld. Commissioner (A) has declined to modify or simply affirm the order. Further, in the case of Shiva Builders (Supra) the Honble High Court has framed following issue whether the Commissioner can pass order in revision under section 84 of the Finance Act 1994 when the issue of the appeal decided by the Commissioner (A) is entirely a different issue. In that case the Honble High Court has answered as under:
Exercise of jurisdiction under section 84(4) of the Finance Act when appeal has been preferred non-permissible.
9. Therefore, I hold that the order passed by the Commissioner in review is not sustainable in the eyes of the law. On merits also the Ld. Commissioner (A) has ignored to consider the fact that the Adjudicating Authority has considered that amount of service tax paid by the appellant is show receivable from the excise department. If same would have been considered there was no question of reviewing by the Ld. Commissioner. Therefore, with these observation said order is set aside and on the refund claim of Rs.7,94,490/- is allowed.
10. In the appeal no. ST/00214/2009 I find that as per notification no.32/2004 the appellant was not required to pay Service Tax at all when there is no liability for the appellant to pay Service Tax. Therefore, the provision of section 11(B) of the Act are not applicable to this case as held by this Tribunal in the case of Jubilant Enterprises Pvt. Ltd. (Supra). Therefore, I hold that bar of limitation is not applicable to the facts of this case. Consequently, the order of rejection of refund claim on the ground of limitation is set aside. Consequently, it is held that appellant is entitled to refund claim of Rs.8,26,637/-.
11. With these observations impugned order is set aside. Appeals are allowed with consequential relief.
(Dictated and pronounced in the open court)
(Ashok Jindal) Member (Judicial)
Bhanu
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E/2549/2009-EX(SM)
ST/214/2009-EX(SM)