AI Drafter 
TaxTMI 
TaxTMI 
2024 (5) TMI 1123
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....o any other manufacturer or service providers in India for availing as CENVAT credit or otherwise and if already passed on, order the recovery of the same." 2.1 Appellant is registered as "Input Service Distributor" with the department. A intelligence was gathered by Directorate General of Central Excise Intelligence (DGCEI, in short) Ahmedabad that appellant have not paid appropriate service tax on the "banking and financial services" received by them from M/s Jefferies International Ltd., London (JIL, in short), as the service provider were not having any office in India. On inquiry, vide letter dated 23.07.2007 of DGCEI, appellant informed that 8050 bonds for USD 80.50 Million were issued by them and the amount was received by them between 21st September, 2005 and 4th October, 2005 and they had paid underwriting fee/ placement fee, overheads, legal fees and other charges to M/s JIL. 2.2 Appellant vide their letter dated 30th November, 2007 informed that they were engaged in the manufacture of Soda Ash which is an excisable product falling under Chapter heading 2836 of Central Excise Tariff Act 1985. They had issued Foreign Currency Convertible Bonds (FCCB) in overseas mark....
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....ice Tax Rules, 1994 in as much as they had not declared the correct amount of charges paid by them in lieu of taxable services, received by them in the ST- 3 returns filed by them 2.8 A show cause notice dated 01.10.2007 was issued to the appellant asking him to show cause as to why : (i) Service Tax amounting to Rs. 1,29,31,229/- (Rupees One crore twenty nine lacs, thirty one thousand two hundred twenty nine only ( Service Tax of Rs. 1,26,77,675/- and Education Cess of Rs 2,53,554/-) short paid by them, should not be demanded and recovered from them under section 73 of the Finance Act, 1994 by invoking the extended period of five years as per proviso to sub section (1) of said section 73; (ii) The amount of Service Tax of Rs. 1,29,31,2291-( Service Tax of Rs.1,26,77,675/- and Education Cess of Rs. 2,53,554/-) already paid by them, under protest should not be appropriated towards their aforesaid liability; (iii) Interest at the appropriate rate under section 75 of the Finance Act 1994 should not be recovered from them from the due date on which the Service Tax and Education Cess was liable to be paid to till date; (iv) Penalty under Sections 7....
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....rized representative reiterates the findings recorded in the impugned order. 4.1 We have considered the impugned order along with the submissions made in appeal during the course of arguments. 4.2 Impugned order records the following findings: "5.15 Subsequently, CBEC vide its Circular No. 276/8/2009-CX. 8A dated 26.09.2011 clarified as under:- "F. No. 276/8/2009-CX8A Government of India Ministry of Finance Department of Revenue ( Central Board of Excise & Customs ) **** New Delhi, dated the 26th September, 2011 TO, 1. All the Chief Commissioner of Central Excise/LTU 2. All Commissioner of Central Excise/Service Tax Sir/Madam, Sub : Applicability of service tax on taxable services provided by a non- resident or a person located outside India to a recipient in India-reg Kind attention is invited to instruction F No, 275/7/2010-CX8A, dated 30.6.2010, wherein the Board had communicated its view that services tax on a taxable service received in India, when provided by a non-resident/ person located outside India, would be applicable on reverse charge basis with ef....
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....& Financial Services" to M/s GHCL (Indian Company) during the period 21st September‟2005 to 4^th October‟ 2005. Therefore, the circumstances mentioned in the Board‟s F.No. 276/8/2009-CX. 8A, dated 26-9-2011 are squarely applicable to this case. In the said circular it has been referred that „the appeals filed by the department before the Hon‟ble Supreme Court, for defending the levy of service tax on such services w.e.f. 1-1-2005, have been dismissed recently (subsequent to the issuance of said instruction dated 30-6-2010 in the following cases (i) SLP (C) No. 29539 of 2010 in CCE v. Bhandari Hosiery Exports Ltd, [2010 (20) S.T.R. (J99) (S.C.)] (ii) SLP (C) No, 18160 of 2010 in CST v. Unitech Ltd (iii) SLP (C) No, 34208/09 of 2010 in UOI v. S.R. Badiboi & Co (iv) SLP (C) No, 328/332 of 2011 in U01 v. Ernst & Young (v) SLP (C) No. 25687-25688/2011 in CE v. Needie Industries (vi) SLP (C) No. 25689-25690/2011 in U01 v. SKM Engg Products Further, Review Petition No. 1686 of 2011 filed in the case of Bhandari Hosiery has also been dismissed by the Hon‟ble Supreme Court vide order dated 18-....
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....tributed is recoverable from them in view of this order." 4.3 From the impugned order it is evident that the demand of service tax made against the appellant by the show cause notice dated 01.10.2007 has been dropped by the adjudicating authority. Revenue has not filed any appeal nor any cross objections in the matter challenging that part of the order. During the course of investigation appellant had deposited the entire amount of service tax demanded, under protest. They had taken the credit of the same and distributed the same to their manufacturing units as input service distributor for utilizing the same for payment of central excise duty on the clearance of excisable good manufactured and cleared from their manufacturing units. Appellant have filed this appeal only against that part of the order by which Commissioner has disallowed such distribution of cenvat credit taken by them of the said amount paid under protest and ordered for its recovery. 4.4 As per the impugned order the demand of service tax made against the appellant has been dropped. They had deposited the amount demanded in show cause notice during the course of investigation under protest and are entitled ....
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....Creative Enterprises has been upheld by the Apex Court [see 2009 (243) E.L.T. A121] by dismissing the SLP filed by the Revenue." 4.8 We are in agreement with the submission made by the appellant that show cause notice issued to them do not record any reason or the provisions in law as per which this recovery of CENVAT Credit is to be made. Even the impugned order does not record any provisions under which this recovery has been ordered. In absence of statement of any such provision in the show cause notice or the impugned order, the impugned order to this extent cannot be upheld. We would rely upon the decision of the Hon'ble Allahabad High Court in the case of HCL Comnet System & Services Ltd. [2017 (12) TMI 1661 Allahabad High Court] observing as follows : "There is no dispute on facts inasmuch as that it is a matter of record that the application of the appellant for refund was rejected by the authority by way of an order dated 23.01.2014. Against the order rejecting the refund, the assessee had filed an appeal, which was allowed in part. Thereafter the assessee filed an appeal before the Tribunal. The Tribunal vide its impugned order has come to the conclusion that ....
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....this Tribunal has held that prior to 1-1-2005 the service receiver was not liable to pay service tax for the service received from a non-resident service provider and the government cannot keep with its amount that is not due to it. In this case also the appellant is not liable to service tax on the service availed prior to 1-1-2005. Hence, the amount deposited by the appellant is entitled to take cenvat credit of the said amount. As the appellant paid this amount during the course of audit conducted by the departmental officers and took the same. Accordingly it is situation revenue neutral. Hence, the appellant is not liable to reverse the cenvat credit availed of service tax which was not liable to pay service tax. Accordingly, the impugned order is not sustainable." 4.9 In case of Sundaram Clayton Ltd [2014 (33) STR 414 (T)] following has been held: "2. I find, in the first place, that since the warehouses were hired in the USA beyond the jurisdiction of the Indian authorities, no Service Tax can be levied and collected on such services rendered and received abroad. Since tax was not, in the first instance, payable and the appellants merely have taken credit of what ....