TaxTMI 
TaxTMI 
2021 (6) TMI 947
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....giving retrospective exemption to the services 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 agg....
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....med as CENVAT. I find that when the appellant has maintained 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." ....
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....e manufacturer of final product or by the provider of output services on or after t6he 10th day of September,2004,............... ...................................................... ......................................................... (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 ....
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....onths from the date on which the Finance Bill, 2016 receives the assent of the President." 4.4 As per the plain reading of the above section 102 legislature knowing well that service tax on the construction service obviously paid not only on cash but also by utilizing the Cenvat credit on input service. With this clear 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 p....
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....en by him in respect of inputs received for use in the manufacture of the said final product and is lying in stock or in process or is contained in the final product lying in stock, if,- (i) he opts for exemption from whole of the duty of excise leviable on the said final product manufactured or produced by him under a notification issued 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 b....
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.... it is sold after obtaining the occupation certificate and due to this reason whatever constructed portion sold after obtaining the occupation certificate no service tax was paid. It was the department's case that since no service tax was paid on the part of the residential complex; the assessee was not entitled for the Cenvat credit on the input service attributed to the said service on which no service tax was 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 prop....
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.... was also argued that as per Rule 3 of the CCR, 2004, credit eligibility is to be examined as on date of receipt of input service and not governed by later developments such as portion of property getting converted into immovable property after receipt of completion certificate. It was also argued that while Rule 6 of the CCR, 2004 deals with credits availed afresh, i.e. after output activity becoming exempt, however Rule 11 is the only provision which deals 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 H....
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....rvice, if any, received after obtaining the completion certificate. The respondent did not avail the Cenvat credit in respect of the services received after obtaining the completion certificate in respect of exempted service or avail proportionate credit attributed to the taxable output service. Therefore, Rule 6 has application for the period after obtaining the completion certificate. Rule 11(1), (2) and (3) of the Rules applicable to provision for manufactured goods to hold that in 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 ....
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....xcise authorities except where it has been illegally or irregularly taken. in which event it stands cancelled or, if utilised, has to be paid for. We are here really concerned with credit that has been validly taken, and its benefit is available to the manufacturer without any limitation in time or otherwise unless the manufacturer itself chooses not to use the raw material in its excisable product. The credit is, therefore indefeasible. It should also be noted that there is no corelation of the raw material and the final 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 ha....
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....period for the purposes of seeking refund of the duty under the aforesaid provision. However, clause (e) while stating the "relevant date" clarifies that in case of a person, other than the manufacturer, the date of purchase of goods by other person would be the relevant date. This itself indicates that the person can be other than the manufacturer and Explanation (B) caters to such other person. It is not even necessary to embark on detailed discussion on this aspect inasmuch as we note that the Constitution Bench of this Court in " Mafatlal Industries 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. In....
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....e tax paid by the sub- contractors as a recipient of exempted service. 4.16 Shri H.K Jain Learned Assistant Commissioner (AR) appearing on behalf of the revenue heavily relied upon the decision of this tribunal in the case of Shree Gurukrupa Construction (supra). We find that this decision has not considered the latest legal position settled by Hon'ble Gujarat High Court in the case of M/s Alembic Ltd. Therefore, the decision in the case of Shree Gurukrupa is distinguished. 4.17 There is one more issue in the present case that out of the subject refund in the present appeal the 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/ agree....
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.... Cenvat credit and also the interest paid for delay in payment of service tax. 7. Accordingly, the impugned order is modified to the above extent and appeal is allowed with consequential relief, if any, in accordance with law." It can be seen that the above order has considered the identical issue and the Division Bench of this Tribunal has held that the appellant is entitled for refund as well as the interest paid on the Service Tax payment. Following the above decision of this Tribunal, I am of the view that the appellant is entitle for refund on merit of Service Tax and interest, if any, paid for the delayed payment of Service 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 ....
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....e appellant have shown an amount of Rs. 51,91,234/- as outstanding in their balance sheet under 'sundry debtors' as receivable from Gujarat Council of Primary Education. I find that on this basis, the Commissioner (Appeals) held that the amount is not lying under 'Service Tax receivable' which is necessary pre-condition to be satisfied for granting of refund. The appellant submitted that the treatment of amount in the balance sheet is not a determining factor for grant of refund. I find that the appellant had submitted the ledger account of Service Tax payable wherein the total amount of Service Tax payable in case of all the bills is stated on the credit side and the mode 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 h....
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....ntry 12A of the mega exemption Notification are not proper inasmuch as there were all the documents to show that the services provided by them were covered by the said entry. As regards unjust enrichment angle he observed as under:- "3.4 Further, it is observed that for executing these work orders, the appellants did not raise any bill/invoice on the concerned department of the Government of Uttar Pradesh and on the basis of their estimates provided to the Government of Uttar Pradesh for such works, they had received the funds from the Government of Uttar Pradesh. Since prior to 01.04.2015, Service Tax on such work orders, was exempt under Sl.No.(a), (c) & (f) of the entry 12 of the Mega Exemption, the funds received by them during 2015-16 did not include the Service Tax element. Since such work orders had become taxable during 01.04.2015 to 29.02.2016, they paid the Service Tax out of these funds allotted by the Government of Uttar Pradesh which did not include the Service Tax element." 5. As is seen from the above findings of Commissioner(Appeals), he has observed that the contracts with the Government were executed when the services were exempted in terms of va....