TaxTMI 
TaxTMI 
2024 (4) TMI 861
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....10 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 the provisions of Rule 5 of CENVAT Credit Rules, 2004 read with Notification No 5/2006-CE (NT) dated 14.03.2006. All the....
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.... 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 Registration no. AAACV9922BST004. filed 4 (four) refund claims under Rule 5 of Cenvat Credit Rules 2004 (in read with Notification No. 5/2006-C.E. (N.T.) dated 14/03/2006 for refund of cenvat credit taken on inputs/ input services used for export of ....
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....ppellant 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 Special Economic Zone unit, it shall have two distinct identities with separate books of account, but it shall not be necessary for the Special Economic Zone unit to be a separate legal entity" 6.2 The above provisions of SEZ Rules 2006 mandate that a company operating both under DTA and SEZ/STPI shall have two distinct identities with separate books of account. The....
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..../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 taxable service to his DTA units admittedly against realisation of service consideration in the facade of salary/allowances and therefore case laws relied upon by him are not applicable here. Accordingly, I find that the contention of the appellant for non-payment of service tax for services provided by his STPI unit to his DTA units is totally against the mandatory pre-condition prescrib....
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.... 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 2008-09 to 2010-11 (upto Nov.2010) on which the service tax liability comes to Rs. 12202050/- It has also been alleged in the Show Cause Notice that the party has failed to pay the service tax on the value of taxable services so realized by them and have suppressed the facts while filing the refund claim as they have not declared the fact to the department that they are 100% E.O.U under STPI scheme re....
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....s 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 been any accumulated amount of Cenvat Credit with the party and their no refund claim would have been filed by them. Also one main issue is, as to whether the amount involved in this SCN had become time barred under the provision of Section 11B of the Central Excise Act, 1944, at the time of filing of refund by the party or not. The second issue is as to whether the party was eligible to take the cenvat credit (of the amount involved in this SCN) as the said....
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....ch 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 recovering certain amounts as detailed in table below from their own units located in DTA, towards "salary and allowances" Year Salary Expenses on own DTA business Total salary expenses as per B/Sheet Staff used for export services Export Sales Notional sales to their own group companies on the basis of salary expenses Service Tax Liability 2008-09 9106328 48119194 39012866 136632497 31892564 3941921 2009-10 14724219 55544781 40820562 167999092 60598270 6241622 2010-11 (upto Nov.2010) 12740....
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....orities 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 Rule 5. All operate under separate sphere and needs to be examined as per the parameters laid down as per law. I do not find any merits in the impugned order to this extent. 4.6 On the issue of limitation also i.e. do not find any merits in the impugned order in view of the decision of larger bench in case of Span Infotech (India) Pvt ltd. [2018 (12) GSTL 200 (T-LB)]] holding as follows: "9. Rule 5 of the Cenvat Credit Rules, 2004 provides for refund of unutilized Cenvat credit, even after adjustment of the same for payment of duty of excise or service tax. The conditions, safeguards and limitations for consideration of such r....
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....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 expressed the view that relevant date in the case of export of services may be adopted on the same lines as the amendment carried out in the Notification No. 27/2012, w.e.f. 1-3-2016. Essentially, after this amendment the relevant date is to be considered as the date of receipt of foreign exchange. While this proposition appears attractive, we are also persuaded to keep in view the observations of the Hon'ble Supreme Court in the case of Vatika Township (supra), in which the Constitutional Bench has laid down the guideline that any beneficial amendment to the statute may be given benefit retrospectively but any provision imposing burden or liability on the pub....