TaxTMI 
TaxTMI 
2023 (12) TMI 843
X X X X Extracts X X X X
X X X X Extracts X X X X
....tral Excise Registration No. AAACV8490QXM001 and Service Tax Registration No. AAACV8490QST001, had imported raw material, goods and machinery during May and June 2017. The transportation in vessel was arranged by the foreign shipping liner and freight charges were being paid on CIF basis. Service tax exemption for services provided by a person located in non-taxable territory to a person located in non- taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearances in India was withdrawn and Notification No. 15/2017-ST dated 13-04-2017 (effective from 23-04-2017) defined importer under Clause (26) of Section 2 of Customs Act, 1962 as a specified person liable to pay Service tax in case of services provided or agreed to be provided by a person located in non-taxable territory to a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the Customs Station of clearance in India. Further, vide Notification No. 16/2017-ST dated 13-04-2017 (effective from 23-04-2017), Service Tax rules have been amended wherein Rule 6(7CA) was inserted and option had been gi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....wach Bharat Cess and Krishi Kalyan Cess. 2.5 Aggrieved, the department filed an appeal before the Commissioner (Appeals-II), Chennai who vide Order-in-Appeal No. 44/2022-ST dated 28.09.2022 assailed and set aside the impugned Order-in-Original granting refund to the Appellants and hence the Appeal before this forum. 3. The Ld. Advocate Shri Venkatachalam appeared and argued for the Appellant. It was submitted that the appellants filed refund claim dated 13.06.2019 for Rs.5,05,426/- which is pertaining to the input service tax credit available to the Appellants as per law and such amount was paid as directed by the internal audit party for which the Appellants are entitled to take input service tax credit as it is an input service. 3.1 It was further submitted that the Appellants could not take CENVAT Credit of the Service Tax amounts paid under reverse Charge Mechanism and there is no averment in the show cause notice that the Appellants are not entitled for such credit. The amendment regarding Service Tax on Ocean Freight was made in April 2017 and the Periods of dispute itself is only for May and June 2017. Hence the averments that the Appellants should have paid Service....
X X X X Extracts X X X X
X X X X Extracts X X X X
....avour of the Appellants. The Appellants also submitted that the Hon'ble High Court of Gujarat in the case of Sal Steel Ltd. Vs. Union of India [2020 (37) GSTL 3 (Guj.)] held that the provisions and notifications which levied service Tax on Ocean freight are ultravires and accordingly allowed the appeals of the parties and thus the demand of Service Tax on ocean freight under reverse charge mechanism is not legal and proper and accordingly the Appellants are not liable to pay the Service Tax on the same and thus the appellants are eligible for the refund of service Tax and interest paid. The department cannot retain the amount paid by an assessee without authority of law. Hence the demand made out by the Internal Audit is not sustainable in law and the payment is liable to be refunded. 3.5 The Ld. Advocate also pointed out that in various orders of the Hon'ble High Courts, it was held that the demand of service Tax on ocean freight was unsustainable. One such judgement has been upheld by the Hon'ble Supreme Court and hence the demand itself is not sustainable in law and accordingly the refund is in order. The Hon'ble High Court of Madras in the case of M/s. Ganges International P....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Chryso India Pvt. Ltd. Vs. Commissioner of Central Excise & GST [2021 (55) GSTL 159 (Tri.-Del.)]. (iv) Bharat Oman Refineries Ltd. Vs. Union of India [2020 (41) GSTL 292 (Guj.)]. (v) Cosmol Energy Pvt. Ltd. Vs. State of Gujarat [2021 (55) GSTL 390 (Guj.)] (vi) Panasonic Energy India Co. Ltd. Vs. Commissioner of Customs, Central Excise & CGST, Indore [2022 (58) GSTL 315 (Tri.-Del)]. (vii) Union of India Vs. Mohit Minerals Pvt. Ltd. [2022 (61) GSTL 257 (SC)]. (viii) Terex India Pvt. Ltd. Vs. Commissioner GST & Central Excise [2022 (63) GSTL 238 (Tri.-Chennai)]. (ix) Sal Steel Ltd. Vs. Union of India [2020 (37) GSTL 3 (Guj.)]. (x) Assistant Commissioner of GST & Central Excise Vs. Ganges International Pvt. Ltd. [2023 (68) GSTL 134 (Mad.)]. (xi) Shree Mahesh Oil Products Vs. Union of India [2023 (68) GSTL 126 (Raj.)]. (xii) Commercial Taxed Officer, Rajasthan GST Department Vs. Shree Mahesh Oil Products [2023 (68) GSTL 113 (SC)]. (xiii) Louis Dreyfus Company India Pvt. Ltd. Vs. UOI [2022 (65) GSTL 261 (Guj.)]. (xiv) ADI Enterprises Vs. Union of India [2022 (64) GSTL 392 (Guj.)]. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....7.1.3 Similar views were expressed in the case of CHRYSO INDIA Pvt. Ltd. Versus Commissioner of Central Excise & GST, ALWAR [2021 (55) G.S.T.L. 159 (Tri. - Del.)]. 7.1.4 In obedience to the judicial discipline, I have to hold that the recovery of Service Tax on Ocean freight is not legally justified and hence the demand is not maintainable. 7.2 Whether the appellants are eligible for sanction of refund of Service Tax paid on Ocean Freight and on licence fee paid to Government under Reverse Charge basis paid for the period prior to 01.07.2017, under Section 142(3) of CGST Act,2017 and whether the said refund becomes inapplicable in view of section 148(8)(a) of CGST Act? 7.2.1 I find that the refund claim has been rejected by Commissioner (Appeals) by resorting to Section 142(8)(a) of GST Act, 2017 . I find that similar issue was analyzed by the Tribunal regarding the issue of sanction of refund of Service Tax paid during the GST era in INDO TOOLING Pvt. Ltd. Vs. Commissioner, CGST & Central Excise, INDORE [2022 (61) G.S.T.L. 595 (Tri. - Del.)] wherein it was held as follows: "8. Having considered the rival contentions, I find that payment of service tax including t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ording to the provisions of the existing law. As the appellant was entitled to Cenvat credit of the said amount of Rs. 9,85,827/-, which is now no longer available due to GST regime, they are entitled to refund of the said amount." 7.2.2 I also find that in Appeal No. ST/40095/2021-SM pertaining to TEREX INDIA Pvt. Ltd. Vs. Commissioner of GST & C.E., Salem in [2022 (63) GSTL 238(Tri-Chennai)], this Tribunal on a similar issue has held that : "6.2 The refund claim has been rejected resorting to Section 142(8)(a) of GST Act, 2017. The provision has already been noticed in earlier paragraphs. The department is of the view that the payment made by the appellant is consequent to an assessment/adjudication proceeding and therefore, when recovered as an arrears of tax, the appellant is not admissible for the input tax credit under the GST Act, 2017. On bare perusal of Section 142(8), it can be seen that this sub-section (8) provides for recovery of arrears of tax after the implementation of GST Act, 2017. It deals with the provisions for assessment/adjudication proceedings that are carried out under the erstwhile law after introduction of GST. The section states that in such ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessment or adjudication. In such a scenario, only sub-section (3) of Section 142 will be attracted. Rejection of the refund claim by referring to sub-section (8) of Section 142 of CGST Act, 2017 is misplaced. For these reasons, rejection of refund is unjustified " 7.2.3 Similar views were held by this Tribunal in ITCO INDUSTRIES LTD. Versus COMMISSIONER OF GST & CENTRAL EXCISE, SALEM [2023 (70) GSTL 76(Tri-Chennai)] wherein it was held that "11. From the narration of facts, it can be seen that Department has rejected the claims invoking Rule 9(1)(b) of Cenvat Credit Rules, 2004. The said provision has already been reproduced above. The Department is of the view that credit is not eligible as appellant has paid the duties only after issuing a demand notice. On perusal of the alleged demand notice, it is merely in the nature of an intimation letter and has not been issued invoking any provisions of Customs law or Excise law. Further, in such intimation also, there is no allegation of any fraud, collusion or suppression of facts with intent to evade payment of duty. There is no evidence placed before me to establish that the duties were paid after adjudication and renderi....