TaxTMI 
TaxTMI 
2024 (4) TMI 861
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....12/ST/Noida /APPL/N0I/2017-18 R-296/DC/DIV- III/ST/NOIDA/2016-17 April 2010 to June 2010 7,18,402/- 4 1013/ST/Noida /APPL/N0I/2017-18 R-293/DC/DIV- III/ST/NOIDA/2016-17 July 2010 to September 2010 20,32,043/- 1.2 Order in Original No R-294/DC/DIV- III/ST/NOIDA/2016-17 dated 31.03.2017: "Order 1. I hereby reject the refund claim for Rs 3,44,879/- (Rs. Three Lakh Forty Four Thousand Eight Hundred and Seventy Nine Only) submitted by the party under section 11B of the Central Excise Act, 1944. 2. I also disallowed the Cenvat Credit of above mentioned amount of Rs 3,44,879/- (Rs. Three Lakh Forty Four Thousand Eight Hundred and Seventy Nine Only)wrongly taken by the party on ineligible input services, on the grounds as discussed above, I also order for the recovery of the said amount from the party under Rule 14 of the Cenvat Credit Rule 2004 read with Section 73 of the Finance Act, 1994, along with the due amount of interest liable thereon. 3. I impose a penalty of Rs 3,44,879/- (Rs. Three Lakh Forty Four Thousand Eight Hundred and Seventy Nine Only) on the party under Section 78 of the Finance Act, 1994, for violation of t....
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....y be paid by the party forthwith." 3.2 Order in Original No R-293/DC/DIV- III/ST/NOIDA/2016-17 dated 31.03.2017 "Order 1. I hereby reject the refund claim for Rs 20,32,043/- (Rs. Twenty Lakh Thirty Two Thousand and Forty Three Only) submitted by the party under section 11B of the Central Excise Act, 1944. 2. I also disallowed the Cenvat Credit of above mentioned amount of Rs 20,32,043/- (Rs. Twenty Lakh Thirty Two Thousand and Forty Three Only) wrongly taken by the party on ineligible input services, on the grounds as discussed above, I also order for the recovery of the said amount from the party under Rule 14 of the Cenvat Credit Rule 2004 read with Section 73 of the Finance Act, 1994, along with the due amount of interest liable thereon. 3. I impose a penalty of Rs 20,32,043/- (Rs. Twenty Lakh Thirty Two Thousand and Forty Three Only) on the party under Section 78 of the Finance Act, 1994, for violation of the provisions of Rule 5 of CENVAT Credit Rules, 2004 read with Notification No 5/2006-CE (NT) dated 14.03.2006. All the above mentioned dues may be paid by the party forthwith." 2.1 The appellant, having Service Tax Registrat....
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.... 4.1 I have considered the impugned order along with the submissions made in appeal and during the course of arguments. 4.2 For upholding the orders in original rejecting the refund claims filed by the appellant, impugned order observes as follows: "6.1 I have carefully gone through the facts and records of the case, submissions made by the appellant in the grounds of appeal and during the personal hearing. The appellant contended that in case of self-services provided to his own units situated in Kolkata and Baddi, the provider and receiver of services are one and same entity and in absence of distinct service provider and receiver, there cannot be any provision of service and there is no service tax liability in the hands of the appellant 6.2 In the above issue, the provisions of Rule 19(7) of the Special Economic Zones Rules, 2006 (in short "the SEZ Rules 2006") are squarely applicable to the appellant's STPI unit, text of which is reproduced below for ready reference:- "SPECIAL ECONOMIC ZONES RULES, 2006 - CHAPTER III - PROCEDURE FOR ESTABLISHMENT OF A UNIT: RULE 19(7) If an enterprise is operating both as a Domestic Tariff Area unit as well as a....
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...., the very artificial creation of treating a SEZ/STPI unit separate and distinct for accounting, consumption of raw materials, production and clearance purposes would shatter. 6.4 It is also to be noted here that the Central Government is extending certain benefits to SEZ/STPI units for specific purposes of promoting exports and necessary procedures/safeguards have been formulated/prescribed in the Act and Rules thereof to avert misuse of the Scheme and to prevent Revenue leakage. Those stipulated procedures are not mere technical formalities but are stringent and inflexible requirements to be complied with great precision by the units claiming benefits under SEZ/STPI scheme without any deviation. Otherwise, such export promotion schemes like SEZ/STPI will be in a total chaos and interest of Revenue will be jeopardized, All the case laws relied upon by the appellant were relating to the supply of services from SEZ unit to DTA unit of the same company without any service consideration and accordingly it was held therein that service tax was not applicable in absence of any service consideration. On the other hand, in the instant case, the STPI unit of the appellant supplied....
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....m referring to Order in Original No R-295/DC/DIV- III/ST/NOIDA/2016-17 dated 31.03.2017 in my discussions wherein following findings have been recorded: "I have carefully gone through the case file i.e. refund claim filed by the party, contents of the SCN, defence reply submitted by the party and the record of personal hearing. From the facts of the case it has been noticed that the party a 100% EOU is engaged in providing the "Information Technology Software Services" where is covered under the definition of taxable services under Section 105(zzzze) of the Finance Act 1994. It has also been noted that in the course of export of the above mentioned taxable service the party also does work for the own manufacturing units situated in Kolkata and Baddi. Thus the party is also providing its services in the Domestic Tariff Area i.e. units located at Kolkata and Baddi and collected the amount (i.e. Service charge) in the form of salary and other allowances from their head office and other units situated at the above mentioned places. As per the Calculation chart provided in the show cause notice itself, the notional sale on this amount comes to Rs. 112087986/- during the period ....
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.... liable to pay the amount of service tax on the value of services provided by them to the units situated at Kolkata and Baddi. Secondly I have noticed that the party had received the amount (value of their services) in the name of Salary, other allowances, Normally, in such cases inter-unit debit notes are issued to amount for the case of goods (if any) and services supplied by one unit to other unit. But in the instant case, this fact was willfully suppressed by way of receiving the said amount in the form of salary & other allowances. This clearly indicates that the unit (the party) was fully aware of the fact, that payment of service tax would become liable, if the amount received was shown as the value of services provided by them to their Kolkata and Baddi units. Moreover it has also been noted that they had never intimated / disclosed this fact to the department that they are 100% EOU this fact came to the notice of the department, only when an audit was conducted in their unit. From the above mentioned facts it can easily be understood that if the party would have discharged their service tax liability properly and correctly, there would have not b....
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....me limit of one .year should be counted from the date of input service invoice(s). Therefore, in view of the above discussion, I have come to the concussion that:- 1. The party has willfully suppressed the vital facts from the department such as not disclosing their 100% EOU status and by receiving the value of the services provided to their Kolkata and Baddi units, in the name and form of salary & other allowance Just to evade the payment of service tax liable on such amount. 2. The party has filed the refund claim of Rs. 3,02,757/- in contravention of the provisional of Rule 5 of the Cenvat Credit Rule 2004 read with Notification No. 5/2006- CE (NT) dated 14.03.2006, as there would have been no accumulated amount of Cenvat credit, if they had discharged their service tax liability properly. 3. The alleged amount of service Tax Rs, 3,02,757/- is demandable and recoverable from the party along with interest. 4. Their refund claim amounting to Rs. 3,02,757/- is not admissible and liable to be rejected for the reason as discussed herein above." 4.4 The entire case against the appellant is based on the fact that appellant had been recove....
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....ad of confirming the demand of the service tax, due adjudicating authority not only denied the refund claim mad under Rule 5 of CENVAT Credit Rules, 2004, but also denied the Cenvat Credit of the amount claimed as refund of accumulated ground for the reason that the same has not been utilized for payment of service tax due. This credit has been denied by invoking the provisions of Rule 14. 4.5 The manner in which the issue has been handled and decided by the lower authorities is not only unique but is totally alien to the legal provisions outlined by Finance Act, 1994 and the rules made there under. In case the revenue authorities were of the view that certain amount of tax due was not paid by the appellant, then the proper course would have been to confirm the demand under Section 73 of the Finance Act, 1994 and recover the amount so confirmed, from the amounts admissible as refund to the appellants by appropriating the same against amounts confirmed. It could have been adjusted against the amount available in the CENVAT credit as admissible credit. Non payment of some amounts towards due service tax liability cannot be reason for denial of CENVAT Credit or the refund under Rul....
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....efinition of relevant date in Section 11B does not specifically cover the case of export of services. Hence, it is necessary to interpret the provisions constructively so as to give its meaning such that the objective of the provisions; i.e. to grant refund of unutilized Cenvat credit, is facilitated. By reference to the Service Tax Rules, 1994 as well as the successor provisions i.e. the Export of Services Rules, 2005, we note that export of services is completed only with receipt of the consideration in foreign exchange. Consequently, the date of Foreign Inward Remittance Certificate (FIRC) is definitely relevant. The Hon'ble Andhra Pradesh High Court has held that the date of receipt of consideration may be taken as relevant date in the case of Hyundai Motors [2015 (39) S.T.R. 984 (A.P.)]. 12. The related question for consideration is whether the time limit is to be restricted to the date of FIRC or can be considered from the end of the quarter. The Tribunal in the case of Sitel India Ltd. (supra), has observed that the relevant date can be taken as the end of the quarter in which FIRC is received since the refund claim is filed for the quarter. 13. Revenue has....