TaxTMI 
TaxTMI 
TaxTMI 
2021 (6) TMI 947
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....ices provided to the various Government departments for the period from 01/04/2015 to 29/02/2016. Section 102 of Finance Act, 1994 also provided for the refund of Service Tax paid by the assesses during the period 01/04/2015-29/02/2016. Section 102 of Finance Act, 1994 also provided the timelines for filing of such refund claim. The appellants filed refund applications. However, said refund claim after due process of natural justice rejected by the Deputy Commissioner. The appellant being aggrieved by the rejection order of the Deputy Commissioner filed appeal before the learned Commissioner (Appeals). The learned Commissioner (Appeal) on facts agreed that the refund is payable. However, he rejected the refund claim on the ground that since the output services are exempted in terms of Rule 6, the appellant is not entitled for refund on the Service Tax paid by utilizing Cenvat Credit on input services. In the case of Tarang Construction, the learned Commissioner also held that the refund claim is not hit by the unjust enrichment. However, in the case of other two appeals, refund was rejected also on the ground of unjust enrichment. Being aggrieved by the impugned orders, the appella....
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....ed separate accounts in terms of Rule 6 of the Cenvat Credit Rules, 2004 and have availed Cenvat credit only on those input services which were used for providing taxable output services, the question of reversal of Cenvat credit under Rule 6 of the Cenvat Credit Rules. 2004 would not arise. However, I find that the appellant has availed Cenvat credit of Rs. 1,82,16,059/- as per Annexure-3 to their refund application in respect of sub- contracted work and this has not been reversed by them at the time of filing of refund claim. I also find that when the appellant has availed Cenvat credit of service tax paid to their sub- contractors, they are not entitled for refund of service tax as it would lead to double benefit to them, once through availment of Cenvat credit and another through refund of service tax, which is not permissible at all. When the appellant has taken Cenvat credit of Rs. 1,82,16,059/- and also utilized, it cannot be said that incidence of such service tax has been borne by them. Therefore, I uphold the impugned order to this extent and reject the appeal for refund of Rs. 1,82,16,059/- to the appellant." 4.1 From the above para it is clear that learned Commissione....
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............. ......................................................... (4) The CENVAT credit may be utilized for payment of - (a)............................ .................................... .................................... ..................................... (e) service tax on any output service." 4.2 As regard nature of service tax there is no dispute that the input service received from sub contractors and used in providing the output construction service in terms of 2 (l) of Cenvat Credit Rules, 2004. In terms of the above Rule 3 since the appellant have received the input service and used the same for output service they are allowed to claim Cenvat credit on the service tax paid on the input service. The said Cenvat credit is also allowed to be utilized for payment of service tax on any output service in terms of Rule 3(4)(e) of Cenvat Credit Rules, 2004. At the time of claiming credit there is no dispute on the fact that the input service received by the appellants was not only intended to be used for providing the output service but in fact it was used for providing output services. 4.3 The output service was provided on payment of service tax ....
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....lear understanding provision of refund of service tax paid on output service was also provided in section 102. There is no provision to given a different treatment of service tax paid on output service that whether the entire service tax was paid from cash or partly paid from cash and partly from Cenvat credit. Therefore, in whatever manner the service tax paid irrespective partly from cash and partly from Cenvat credit, total tax paid by the assessee was mandated to be refunded to the service provider. Therefore, the views of the lower authorities that only because the output service was subsequently exempted by virtue of section 102 the refund of service tax paid through Cenvat credit is not admissible is without any basis and without support of any statutory provisions. 4.5 As we discussed above availment of Cenvat credit and utilization thereof for payment of service tax on output service is not under dispute. The Cenvat credit which was utilized has taken the color of service tax paid and that service tax is refundable in terms of section 102 of Finance Act, 1994. As regard contention of the revenue that the Cenvat credit utilized by the appellant is not admissible to the ap....
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....under section 5A of the Act; or (ii) the said final product has been exempted absolutely under section 5A of the Act, and after deducting the said amount from the balance of CENVAT credit, if any, lying in his credit, the balance, if any, still remaining shall lapse and shall not be allowed to be utilized for payment of duty on any other final product whether cleared for home consumption or for export, or for payment of service tax on any output service, whether provided in India or exported. (4) A provider of output service shall be required to pay an amount equivalent to the CENVAT credit, if any, taken by him in respect of inputs received for providing the said service and is lying in stock or is contained in the taxable service pending to be provided, when he opts for exemption from payment of whole of the service tax leviable on such taxable service under a notification issued under section 93 of the Finance Act, 1994(32 of 1994) and after deducting the said amount from the balance of CENVAT credit, if any, lying in his credit, the balance, if any, still remaining shall lapse and shal....
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.... paid. This tribunal after considering all the provisions of Cenvat Credit Rules came to the conclusion that at the time of availing the Cenvat credit the services were very much taxable, part of the output service became exempted only at the later stage therefore, recovery of the Cenvat credit attributed to the residential complex sold without payment of service tax cannot be made. The facts of the present case are very much similar to the facts in the M/s Alembic Ltd's case. The said judgment of the tribunal was maintained by the Jurisdictional Hon'ble Gujarat High Court as cited (supra). The relevant order portion of the tribunal in the M/s Alembic Ltd case 2019 (28) GSTL 71 (Tri. Ahmd) is reproduced below: "5. The appellants submitted that they availed only proportionate Cenvat credit, determined on scientific basis by them (considering square foot area where Service Tax was paid and balance area where Service Tax will not be paid after completion certificate). They had not only given due intimation in this regard at the time of obtaining completion certificate but also produced CA certificate to support their case in this regard. The present appeals involves the following le....
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....with credits availed in the past when output activity was wholly taxable however, at later point in time, became exempt. 13. We agree with such plea raised by the appellant. While the law does not intend to allow any undue benefit to a service provider in terms of Cenvat Credit of Service Tax paid on input services used in providing non-taxable output activity, however, as held by the Hon'ble Apex Court in the case of Dai Ichi Karkaria, 1999 (112) E.L.T. 353 (S.C.), Modvat/Cenvat credit is a vested right. Once it is legally and validly availed, the same cannot be denied and/or recovered unless specific provisions exist for the same. The appellants have also correctly relied upon the decisions/judgments in the case of HMT Ltd., TAFE, Ashok Iron & Steel Fabricators (supra) wherein an identical situation qua "inputs" used in production of dutiable finished goods was involved, where on a particular date, the said finished goods became exempt and the issue involved was as regards credits availed at a time when such finished goods was otherwise dutiable. 14. It has been a consistent judicial view, including that of the Hon'ble Apex Court in such cases, that credit entitlement is on t....
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....case of service becomes exempted at a later stage, there is no such provision in respect of the service. The only provision for the service is provided under sub-rule (4) of Rule 11 of the Rules which reads as under : "11(4). A person provider of output service shall be required to pay an amount equivalent to the CENVAT credit, if any, taken by him in respect of inputs received for providing the said service and is lying in stock or is contained in the taxable service pending to be provided, when he opts for exemption from payment of whole of the service tax leviable on such taxable service under a notification issued under Section 93 of the Finance Act, 1994 (32 of 1994) and after directing the said amount from the balance of CENVAT credit, if any, lying in his credit, the balance, if any, still remaining shall lapse and shall not be allowed to be utilized for payment of duty on any excisable goods, whether cleared for home consumption or for export or for payment of service tax on any other output service, whether provided in India or exported." 17. From the above sub-rule (4), it is clear that even if an output service provider avails the credit and output service becomes ex....
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....al product; that is to say, it is not as if credit-can be taken only on a final product that is manufactured out of the particular raw material to which the credit is related. The credit may be taken against the excise duty on a final product manufactured on the very day that it becomes available." 6.Therefore, it is clear that there is no provision in the rules which provides for a reversal of the credit by the Excise Authorities except where it has been irregularly taken in which event it stands cancelled or if utilised has to be paid for. This is not the case of the revenue. In the instant case, when the assessee purchased the capital goods and when he has paid the excise duty on them, in law, he is entitled to get the credit on the duty paid while clearing the finished products from his factory. Accordingly, he utilised the cenvat credit and cleared the finished products. It is about three years after such payment, the capital goods were destroyed in fire. As the assessee had insured the said capital goods, he put forth a claim for payment of the loss sustained by him, which includes the payment of excise duty. The Insurance Company in terms of the policy has compensated the ....
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....stries Ltd. and others v. Union of India and others' [1997 (5) SCC 536 = 1997 (89) E.L.T. 247 (S.C.)] has already settled this aspect in the following words :- "(xii) Section 11-B does provide for the purchaser making the claim for refund provided he is able to establish that he has not passed on the burden to another person. It, therefore, cannot be said that Section 11-B is a device to retain the illegally collected taxes by the State. This is equally true of Section 27 of the Customs Act, 1962." 8. We are, therefore, of the opinion that the appellant who had paid the excise duty to the manufacturer, viz., M/s. Indian Oil Corporation Ltd. (hereinafter referred to as "IOCL') and BPCL in the instant case, had the necessary locus standi to file the application claiming the refund of the duty." 4.14 The similar view was expressed by the Hon'ble Bombay High Court in the case of Usha Agarwal 2009 (243) ELT 492 (Bom) wherein it is observed as:- "10. In the instant case as noted, the appellant had purchased goods on which earlier it was assumed that no excise duty was payable. Then a Bank guarantee was obtained from the appellant that in the event the excise duty was demand....
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.... Learned Commissioner ( Appeals) denied the refund of Rs. 38,11,497/- for project B-2/12/2014-15 on the ground that the contract was entered into after 01.03.2015 as per the work order given on 16.03.2015. In this regard it is the appellant's submission that the said tender was opened on 28.01.2015 and the appellants were declared as successful bidder and the same has been accepted as contract. 5. We find that as per the facts before us there is no dispute that the tender was opened on 28.01.2015 and the appellant was declared successful bidder thereafter no separate contract/ agreement was entered into. It is the department's contention that the date of the work order i.e. 16.03.2015 has to be considered as contract. We do not agree with this contention for the reason that work order is only a procedure to begin the work however, since there is no separate contract/ agreement after opening of tender and acceptance thereof by the appellant that itself is treated as contract. Therefore, the date of opening of tender i.e. 28.01.2015 has to be taken as a date of contract. Section 102(1) (c) provides exemption only to those residential complex where a contract is entered into before ....
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....ice tax. 2.1 As regard unjust enrichment in case of Tarang Construction, the learned Commissioner (Appeals) has categorically held that refund is not hit by unjust enrichment. Therefore, the issue of unjust enrichment has attained finality in the favour of the appellant. 2.2 As regard appeal of Standard Buildcon, I find that in this case the service recipient was MES and Okha Nagarpalika. As per the contract clause with Military Engineering Services (Air Force) it is observed that MES has given the instruction to all their contractors to get the refund of Service Tax from the Government itself after the introduction of section 102 of Finance Act, 1994. Therefore, there is no question of payment of Service Tax from MES to the appellant. It is also observed that at the time of entering into contract, there was no Service Tax applicable and thus, there is no question of inclusion of Service Tax in the schedule rate quoted by the appellant. With this fact, it can be constructed that even if the Service Tax was paid by the appellant, the same was not paid by the Service Recipient as per the contract. It is also found that the appellant have submitted the certificate of Chartered Accou....
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....e of its payment is stated on its debit side which includes Cenvat Credit taken and the challans amount. The corresponding entry of Service Tax to be receivable was stated in the account of 'Service Tax Receivable'. This fact established that the incidence of Service Tax for refund which is sought for has not been passed on to the service recipient. The appellant submitted that they have submitted Chartered Accountant certificate showing that the incidence of tax has not been passed on the customer. The appellant has taken support of the following judgments: (i) CCE, Guntur vs. Crane Betel Nut Powder Works, 2011 (274) ELT 113 [CESTAT, Bangalore]; (ii) General Commodities Pvt. Ltd. vs. CST, Bangalore, 2010 (18) STR 460 [CESTAT, Bangalore]; (iii) TTK Textiles Ltd. vs. CCE, Madurai, 2015 (315) ELT 511 (iv) Santosh Patil vs. CCE, Raigad, 2013 (41) STR 90 [CESTAT, Mumbai] 2.4 I find that without any basis the Chartered Accountant Certificate cannot be discarded. Therefore, the same ought to have been accepted. In addition, the appellant also submitted the affidavit signed by all the partners stating that the liability of the Service Tax was borne by them only and have not....