TaxTMI 
TaxTMI 
2025 (11) TMI 510
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....re the jurisdictional authorities claiming that the same has been wrongly charged by their service provider, namely, M/s Bajaj Infrastructure Development Company Ltd., Lalitpur (BIDCO), in the invoices raised on them (appellant). 2.2 In their refund claim, appellant submitted that M/s BIDCO had raised invoices for the advances towards the taxable services, prior to the levy of Swachh Bharat Cess and Krishi Kalyan Cess, and had charged Services Tax, Education Cess and Secondary & Higher Education Cess in these invoices. Subsequently, M/s BIDCO raised invoices for the progressive works carried out by them (M/s BIDCO) and the payments against these invoices, were adjusted from the advances. Further, in such invoices issued after the levy of the Swachh Bharat Cess and Krishi Kalyan Cess, Swach Bharat Cess and Krishi Kalyan Cess were wrongly charged and paid in the Government account. 2.3 During examination of the refund claim, it was noticed that the appellant had awarded contract to M/s BIDCO for carrying out the works of civil construction and erection, commissioning & installation. Since, the appellant failed to (i) provide the details of payment made in full to the service pr....
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....d to have been provided' and as per Rule 3 of Rules ibid wherein modalities for determination of point of taxation are defined, envisage point of taxation to be (a) the time when the invoice for service provided or agreed to be provided is issued; or (b) when any advance amount is received by service provider; and as per proviso (i) to Rule 3, in case of continuous supply of service where the provision of the whole or part of the service is determined periodically on the completion of an event in terms of a contract, which requires the receiver of service to make any payment to service provider, the date of completion of each such event as specified in the contract shall be deemed to be the date of completion of provision of service; moreover as per explanation appended to Rule 3, wherever any advance is received by the service provider towards the provision of taxable service, the point of taxation shall be the date of receipt of each such advance ⮚ The deeming provisions enshrined in Rule 2(e) and explanation to Rule 3 envisage a legal fiction that the service would deem to have been provided to the extent of advance payment on the date of receiving advance. I....
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....e'. ⮚ Learned Commissioner's aforesaid interpretation is also contrary to the provisions of Rule 4 of POTR, 2011, wherein legal framework for determination of point of taxation in case of change in effective rate of tax are enshrined Appellant submits that Clause (i) of Rule 4(b) prescribes that where Invoice has been issued and payment has been received prior to change of Tax rate point of taxation shall be the date of receipt of payment or date of Invoice whichever is earlier. ⮚ Appellant submits that harmonious construction of Rule 2(e), Rule 3(b), Proviso (i) to Rule 3, Explanation to Rule 3, Rule 4(b)() and Rule 5(a) of POTR, 2011 clearly manifest that the point of taxation wherever service provider receives advance payment for providing service on a later date, the date of receipt of such advance payment or date of issuance of Invoice in respect of such advance payment, whichever is earlier, is the point of taxation i.e. Deemed date of providing service to the extent of the advance payment. The interpretation adopted by learned Commissioner has rendered the aforesaid provisions otiose and hence, cannot be countenanced. ⮚....
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....the most can be construed as enhancement of rate of Service Tax which cannot be applied to the amounts received as advance earlier, whereupon Service Tax and applicable Cesses were discharged at the time of issuance of Invoices/receipt of advance payment, though services in lieu of those advances were rendered on a date subsequent to enhancement of Tax rates as in terms of Rule 4(2)(i1) of POTR, 2011, where Invoice has been issued and payment for Invoice has been received before the change in Tax rate, the point of taxation shall be the date of payment or date of Invoice whichever is earlier. ⮚ Appellant most respectfully relies on the following decisions: o Vigyan Gurukul [2012 (25) STR 459 (Tri. - Del.)]; o Bajaj Allianz Insurance Co Ltd. [2009 (13) STR 259 (Tri. - Mum)] o Carrier Point [2018 (10) GSTL 213 (Raj.)] ⮚ As SBC and KKC under the impugned 75 +61 Invoices were paid and collected by the Department was without sanction of law, the same cannot be retained by the Department as have been held in the following cases: o India lspat Works Pvt. Ltd. reported in 2006 (3) STR 161 (Tri. - Del.)] o KVC Cons....
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....r the impugned refund, on 04.01.2017 4.2 On going through the documents submitted by the appellant, I find that they have provided contract-wise charts, in respect of the aforesaid two contracts, showing the details of advances including Service Tax & Education Cesses, invoices issued by M/s BIDCO against advances, subsequent invoices issued for the progressive works, adjustment of advances and details of Swachh Bharat Cess & Krishi Kalyan Cess charged and paid. Further, they have also provided chart showing details of challans and certificate from the Chartered Accountant, namely, M/s R.S. Dani & Co. certifying the details of advances paid by the appellant to M/s BIDCO, Thus, I find that rejection of the refund claim on the technical grounds of non adjustment of the amount of Rs.2,29,86,43,853/- entirely prior to the payment of the additional amount of Service Tax of Rs.21,68,11,410/- and non submission of all the relevant ST-3 returns and the challans, was unjustified 4.3 I also find that Swachh Bharat Cess was introduced, w.e.f. 15.11.2015, vide Section 119 (Chapter VI) of the Finance Act, 2015 read with Notification No. 21/2015-ST dated 06.11,2015 and 'the....
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....spect of Swachh Bharat Cess and Krishi Kalyan Cess, it is required to apply Rule 5 of the Point of Taxation Rules, 201 1 in this case, which provide, as under: Rule_5: Where a service is taxed for the first time, then, (a) no tax shall be payable to the extent the invoice has been issued and the payment received against such invoice before such service became taxable; (b) no tax_ shall be payable if the payment has been received before _the service becomes taxable and invoice has been issued within fourteen daus of the date when the service is taxed for the first time, Explanation 1. - This rule shall apply mutatis mutandis in case of new levy on services Explanation 2. - New levy or tax shall be payable on all the cases other than specified above. 4.4.1 Further, the scope of the Explanation 1 & Explanation 2 in Rule 5 of the Point of Taxation Rules, inserted vide Notification No. 10/2016-ST dated 01.03.2016, was clarified by the Central Board of Excise 8 Customs, vide letter D.O. F. No. 334/8/2016-TRU dated 29.02.2016 of the Joint Secretary (TRU), as under; The Point of Taxation Rules, 2011 have been framed under provisions of clause (a) and (hhh) of sub....
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....accomplished, but certain other formalities are required to be completed from the client's end before an invoice can be issued. 2. These representations have been examined. The Service Tax Rules,_1994 require that invoice should be issued within a period of 14 days from the completion of the taxable service. The invoice needs to indicate, inter alia, the value of service so completed., Thus it is important to identify the service so completed, This would include not only the physical part of providing the service but also the completion of all other auxiliary activities that enable the service provider to be in a position to issue the invoice. Such auxiliary activities could include activities like measurement, quality testing etc which may be essential pre-requisites for identification of completion of service. The test for the determination whether a service has been completed would be the completion of all the related activities that place the service provider in a situation to be able to issue an invoice. However, such activities do not include flimsy or irrelevant grounds for delay in issuance of invoice. The above interpretation also applies to determina....
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....n respect of such invoices involving Krishi Kalyan Cess of Rs.6,32,596/-, there was no requirement for paying Krishi Kalyan Cess. 4.5 . I also find that in terms of Section 11B of the Central Excise Act, 1944 as made applicable to the Service Tax matters, the relevant date for filing the refund in this case was one year from the date of payment of Service Tax, as the refund was filed by the appellant .e., the service receiver). Further, on going through the documents submitted by the appellant, it is observed that Swachh Bharat Cess of Rs.2,48,418/- was paid vide challan dated 04.12.2015. Since in this case, refund was filed on 04.01.2017, I find that refund of Swachh Bharat Cess of Rs.2,48,418/- was barred by time limitation. 4.6 I further find that Section 11B(2) of the Central Excise Act, 1944 provides, as under: Section 11B(2): If, on receipt of any such application, the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise is satisfied that the whole or any part of the duty of excise and interest, if any, paid on such duty paid by the applicant is refundable,. he may make an order accordingly and the amount so determined s....
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....t and deposited the same and accordingly, the claimant has filed refund claim for the said amount which has been paid to the service provider i.e. M/s. Bajaj Infrastructure Development Company Limited. The service provider has claimed the entire contract value and applicable service tax thereon towards the services from the claimant before levying SBC and KKC and after 15,11.2015. M/s. BIDCO (Service Provider) has raised invoices only to adjust the amount, which was claimed as an advance before 15.11.2015, and no-amount was payable-by them against the invoices issued prior to 15.11.2015, M/s. BIDCO has informed them (Claimant) that SBC and KKC should not have been levied as they have already received the entire payment towards such services before 15.11.2015 and 01.06.2016 as the case may be, as an advance payment and progressive payments as well. The claimant has also submitted that Rule 5 of the point of Taxation Rules would be applicable in their case. I also observe that the claimant is a service recipient and M/s. BIDCO is a service provider. The service provider appears to have provided their services to the service recipient and appears to have received the amount a....
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....how that for the invoices on which SBC/KKC has been paid, net taxable value is Nil i.e. to say value of work done has been adjusted with advances received. The charts submitted in support, doubtless, show that w.e.f. 01.10.2015, service provider has issued invoices of NIL' net taxable value after adjustment f advances received, but contrary to it claimant has failed to submit the proper and time to time, 'details of total advances of Rs.554,50,47,376/- said to have been ◦ received by the service provider during the period 04.10.2012 to 30.09.2015 and which has been adjusted in total value for payment of service tax; subsequently. In absence of concrete evidence, which can be only support of intention of claimant that they have already paid the entire amount towards such services as an advance payments, it is anbiguous to make conclusions. The records submitted also show .that he claimant has paid total Rs.784,36,91,229/- as an advance (mobilization adyance) to service provider for Erection services and work contract services time to time on which due service tax have been paid by them. However, it is also resembling that an amount of Rs.5,54,50,47,376/- has been adjus....
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.... invoices and service tax has been paid on the said part of invoice value: As per chart submitted, the service provider has issued invoices after full adjustments of value on such invoices since 01.10.2015; but claimant has failed to produce documents in support of their contention i.e. the details of advances given time to time and utilization thereof, and remaining balance at the relevant time also they failed to prove why the advance amount on which service tax was paid by the service provider, has not been utilized during issuance of invoices and the service tax charged on net taxable value by service provider has been paid by them. The claimant has also failed to submit the evidences of payment of SBC/KKC, as charged by the service provider to them. This itself clarify that the claimant has failed to prove with documentary evidences that tax paid in advance value, of services, by the service provider has been properly utilized and SBC/KKC paid on nil net value, was not payable, accordingly, they were right, to claim for refund of such service tax amount paid advertently and unknowingly to the Govt. Exchequer. I also observe that the claimant has also failed to produce....
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....y years or even much later, a decision is rendered by a High Court or the Supreme Court in the case of another person holding that duty was not payable or was payable at a lesser rate in such a case. (We must reiterate and emphasise that while dealing with this situation we are keeping out the situation where the provision under which the duty is levied is declared unconstitutional by a court; that is a separate category and the discussion in this paragraph does not include that situation. In other words, we are dealing with a case where the duty was paid on account of mis-construction, mis-application or wrong interpretation of a provision of law, rule, notification or regulation, as the case may be.) Is it open to the manufacturer to say that the decision of a High Court or the Supreme Court, as the ease may be, in the case of another person has made him aware of the mistake of law and, therefore, he is entitled to refund of the duty paid by him? Can he invoke Section 72 of the Contract Act in such a case and claim refund and whether in such a case, it can be held that reading Section 72 of the Contract Act along with Section 17(1)(c) of the Limitation Act, 1963, the period of li....
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.... of such decision, irrespective of the fact that they may have paid the duty, say thirty years back, under similar provisions - and their claims are being allowed by courts. All this is said to be flowing from Article 265 which basis, as we have explained hereinbefore, is totally unsustainable for the reason that the Central Excise Act and the Rules made thereunder including Section 11B/Rule 11 too constitute "law" within the meaning of Article 265 and that in the face of the said provisions - which are exclusive in their nature - no claim for refund is maintainable except under and in accordance therewith. The second basic concept of law which is violated by permitting the above situation is the sanctity of the provisions of the Central Excises and Salt Act itself. The Act provides for levy, assessment, recovery, refund, appeals and all incidental/ancillary matters. Rule 11 and Section 11B, in particular, provide for refund of taxes which have been collected contrary to law, i.e., on account of a misinterpretation or mis-construction of a provision of law, rule, notification or regulation. The Act provides for both the situations represented by Sections 11A and 11B. As held by a s....
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....aid provisions is collection or retention under "the authority of law" within the meaning of the said article. In short, no claim for refund is permissible except under and in accordance with Rule 11 and Section 11B. An order or decree of a court does not become ineffective or unenforceable simply because at a later point of time, a different view of law is taken. If this theory is applied universally, it will lead to unimaginable chaos. It is, however, suggested that this result follows only in tax matters because of Article 265. The explanation offered is untenable as demonstrated hereinbefore. As a matter of fact, the situation today is chaotic because of the principles supposedly emerging from Kanhaiyalal and other decisions following it. Every decision of this Court and of the High Courts on a question of law in favour of the assessee is giving rise to a wave of refund claims all over the country in respect of matters which have become final and are closed long number of years ago. We are not shown that such a thing is happening anywhere else in the world. Article 265 surely could not have been meant to provide for this. We are, therefore, of the clear and considered ....
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....d that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of sixty days, allow it to be presented within a further period of thirty days.] [(1A) The Commissioner (Appeals) may, if sufficient cause is shown, at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing : Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal.] (2) Every appeal under this section shall be in such form and shall be verified in such manner as may be specified by rules made in this behalf." 43. As the order of self-assessment is nonetheless an assessment order passed under the Act, obviously it would be appealable by any person aggrieved thereby. The expression 'Any person' is of wider amplitude. The revenue, as well as assessee, can also prefer an appeal aggrieved by an order of assessment. It is not only the order of reassessment which is appealable but the provisions of Section 128 make appealable any decision or order under the Act including tha....
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....Court in Priya Blue Industries Ltd. (supra). 45. Reliance was also placed on a decision of Rajasthan High Court with respect to service tax in Central Office Mewar Palace Org. v. Union of India - 2008 (12) S.T.R. 545 (Raj.). In view of the aforesaid discussion, we are not inclined to accept the reasoning adopted by the High Court, that too is also not under the provisions of the Customs Act." 47. When we consider the overall effect of the provisions prior to amendment and post-amendment under Finance Act, 2011, we are of the opinion that the claim for refund cannot be entertained unless the order of assessment or self-assessment is modified in accordance with law by taking recourse to the appropriate proceedings and it would not be within the ken of Section 27 to set aside the order of self-assessment and reassess the duty for making refund; and in case any person. 4.7 In case of BT (INDIA) PRIVATE LIMITED [Order dated 06.11.2023 in W.P.(C) 13968/2021] F. EXAMINATION OF A REFUND CLAIM 49. That takes us then to the principal question and which relates to the nature and extent of the power that may be available to be exercised by the Adjudicatin....
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....imitations subject to which a refund of CENVAT credit may be allowed. Undisputedly, the notification dated 18 June 2012 owes its genesis to this power which stands placed in the hands of the Board. The said notification in Clause 3(g) obliges the Assistant of the Deputy Commissioner to examine and verify the correctness of the refund claim and to ensure that goods cleared for export or services provided have actually been exported. It is the aforesaid safeguard and condition as contained in that Notification which the respondents would urge us to recognise as conferring an adjudicatory power upon the competent authority while considering a claim for refund. 55. The petitioner on the other hand, contends that the extent of the power which is available to be exercised by an authority while considering a claim for refund is no longer res integra and stands concluded in light of the judgments rendered by the Supreme Court in Flock(India), Priya Blue Industries and ITC limited. 56. In order to evaluate the rival submissions, we firstly note that the Act adopts Section 11B of the Excise Act. As is evident from a reading of the said provision and more particularly Section 11B (2)....
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....e Bill, 2011 receives the assent of the President, such imported goods or export goods shall continue to be governed by the provisions of Section 17 as it stood immediately before the date on which such assent is received." xxxx xxxx xxxx "27. Claim for refund of duty.- (1) Any person claiming refund of any duty or interest,- (a) paid by him; or (b) borne by him, may make an application in such form and manner as may be prescribed for such refund to the Assistant Commissioner of Customs or Deputy Commissioner of Customs, before the expiry of one year, from the date of payment of such duty or interest: Provided that where an application for refund has been made before the date on which the Finance Bill, 2011 receives the assent of the President, such application shall be deemed to have been made under sub-section (1), as it stood before the date on which the Finance Bill,2011 receives the assent of the President and the same shall be dealt with in accordance with the provisions of sub-section (2): Provided further that the limitation of one year shall not apply where any duty or interest has been paid under protest: Provided also....
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....ch duty and interest, if any, paid on such duty to any other person; (ii) the duty and interest, if any, paid on such duty on imports made by an individual for his personal use; (iii) the duty and interest, if any, paid on such duty borne by the buyer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person; (iv) the export duty as specified is Section 26; (v) drawback of duty payable under Sections 74 and 75; (vi) the duty and interest, if any, paid on such duty borne by any other such class of applicants as the Central Government may, by notification in the Official Gazette, specify; (vii) the duty paid in excess by the importer before an order permitting clearance of goods for home consumption is made where- (i) such excess payment of duty is evident from the bill of entry in the case of self-assessed bill of entry; or (ii) the duty actually payable is reflected in the reassessed bill of entry in the case of reassessment. Provided further that no notification under clause (f) of the first proviso shall be issued unless in the opinion of the Cent....
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.... proper officer to pass a speaking order in support of the exercise of reassessment. 58. Section 27 enables a person to claim refund of duty or interest which may have been either paid or borne by it. Section 27(2) of the Customs Act, in terms identical to Section 11B (2) of the Excise Act, speaks of refunds being effected upon the proper officer being satisfied that the whole or any part of the duty paid is refundable. Section 27(2) is thus a provision which is pari materia with Section 11B (2) of the Excise Act. 59. The Supreme Court in ITC Limited, notwithstanding Section 27(2) employing the expression 'satisfied' held that unless a selfassessed return is revised or doubted in exercise of powers of reassessment, best judgment assessment or where it be alleged that duty had been short levied, short paid or erroneously refunded, those powers would not be available to be exercised at the stage of considering an application for refund. Having noticed the statutory position which prevails, we turn then to the decisions which would have a bearing on the question which stands posited. 60. Flock (India) was one of the earliest decisions which dealt with the as....
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....ssion 'assessment' as contained in Rule 2(b) of the 1994 Rules which includes a self-assessment of service tax and thus being evidence of a position similar and akin to that which obtains under the Customs and Excise Acts. 63. Their Lordships in ITC Limited categorically held that notwithstanding a self-assessed Bill of Entry having been merely endorsed by the competent authority, the same would nonetheless amount to an "assessment'. It was in that backdrop that it was held that once a self-assessed return had been duly accepted, the same could not be modified or varied by an authority while considering an application for refund. 64. It becomes pertinent to note that the appellant before the Supreme Court in that case, had sought to press the claim for refund asserting that it had due to inadvertence failed to submit a self assessment return taking into consideration an exemption notification. It was this claim which came to be ultimately negatived by the Supreme Court and which held that a claim for refund cannot be entertained unless the order of assessment, and which would include a self-assessment return, is modified in accordance with the procedure prescribed....
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....hether the provisions of Rule 5 read along with the various prescriptions contained in the notification dated 18 June 2012 had been complied with. The respondents, at this stage of the proceedings, could not have doubted, questioned or undertaken a merit review of the self-assessed return which had been submitted. 68. The reliance which is placed on Clause 3(g) of the Notification dated 18 June 2012 also would not justify the denial of refund, since the expressions "determine' and "satisfy' as appearing in the parent Rule as also the Notification noted hereinabove would have to be construed bearing in mind the limited jurisdiction and authority which was available in the hands of the Adjudicating Authority and exercised by it while considering the application for refund. In any case, the mere usage of the expressions 'determine' or 'satisfy' would, in our considered opinion, not amount to expanding the nature of the authority which the second respondent could have exercised while evaluating an application for refund. Once the self-assessed return of the petitioner and in terms of which its claim of refund and of being inexigible to service tax had attained finality and had....
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....the following propositions. We may forewarn that these propositions are set out merely for the sake of convenient reference and are not supposed to be exhaustive. In case of any doubt or ambiguity in these propositions, reference must be had to the discussion and propositions in the body of the judgment. (i) Where a refund of tax/duty is claimed on the ground that it has been collected from the petitioner/plaintiff - whether before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991 or thereafter - by mis-interpreting or mis-applying the provisions of the Central Excises and Salt Act, 1944 read with Central Excise Tariff Act, 1985 or Customs Act, 1962 read with Customs Tariff Act or by mis-interpreting or mis-applying any of the rules, regulations or notifications issued under the said enactments, such a claim has necessarily to be preferred under and in accordance with the provisions of the respective enactment before the authorities specified thereunder and within the period of limitation prescribed therein. No suit is maintainable in that behalf. While the jurisdiction of the High Courts under Article 226 - and of this Court under Article 32 -....
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....e may be. Whether the claim for restitution is treated as a constitutional imperative or as a statutory requirement, it is neither an absolute right nor an unconditional obligation but is subject to the above requirement, as explained in the body of the judgment. Where the burden of the duty has been passed on, the claimant cannot say that he has suffered any real loss or prejudice. The real loss or prejudice is suffered in such a case by the person who has ultimately borne the burden and it is only that person who can legitimately claim its refund. But where such person does not come forward or where it is not possible to refund the amount to him for one or the other reason, it is just and appropriate that that amount is retained by the State, i.e., by the people. There is no immorality or impropriety involved in such a proposition. The doctrine of unjust enrichment is a just and salutory doctrine. No person can seek to collect the duty from both ends. In other words, he cannot collect the duty from his purchaser at one end and also collect the same duty from the State on the ground that it has been collected from him contrary to law. The power of the Court is not meant t....
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....uty to another person, it would be unjust to allow or decree his claim since it is bound to prejudicially affect the public exchequer. In case of large claims, it may well result in financial chaos in the administration of the affairs of the State." 4.10 In view of the above referred decisions of the Hon'ble Supreme Court and High Court we do not find any merits in this appeal. We also do not find that the decision relied upon by the appellant would support their case contrary to the above referred decision. 5.1 Appeal is dismissed. (Pronounced in open court on- ) (Separate Order) (P.K. CHOUDHARY) MEMBER (JUDICIAL) Sd/- (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) P. K. CHOUDHARY: I have carefully perused the findings of my learned brother Mr. Sanjeev Srivastava, Member (Technical), contained in para nos. 4.1 to 4.10 above; and considered the impugned Order-inAppeal No.187/ST/Appl./Alld/2018 dated 23.02.2018 and Orderin-Original No.29-ST/Refund/DC/2017 dated 07.06.2017. I have also perused the ST-3 Returns pertaining to relevant period and Invoices issued by BIDCO for advances and running Invoices iss....
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....aforesaid Invoices BIDCO charged Service Tax + Cesses as applicable on the Invoice Value arrived by deducting advances from the value of service rendered. Appellant paid the Invoice Value and Taxes as indicated in the Invoices and BIDCO in turn deposited the Service Tax so collected on due dates. Wherever the Invoice value was zero as entire value of services were adjusted against advances, BIDCO did not charge any Tax. All these Invoices for advance payments and Running Invoices issued after part performance including those with zero Invoice value are available on record and there is no dispute qua the authenticity of the same. 6. Vide Section 119 of the Finance Act, 2015 read with Notification No.22/2015-ST dated 06.11.2015, Central Government introduced Swachh Bharat Cess with effect from 15.11.2015 @ 0.5% of the value of Taxable Services. Similarly, vide Section 161 of Finance Act, 2016, Central Government introduced Krishi Kalyan Cess with effect from 01.06.2016 @ 0.5% on the value of Taxable Services. As per appeal papers, after introduction of SBC with effect from 15.11.2015, BIDCO issued 52 Running Invoices with zero invoice value in respect of EPI Contract adjusting the....
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....d to submit the evidences that the payment so made were inclusive of Service tax or exclusive of service tax and the that the said payments were full and final to the contracted value. They have also failed to clarify that the SBC/KKC were not liable to paid according to the provisions of Service Tax / Rules. The claimant's contention that Rule 5 of the point of Taxation Rules would be applicable in their case, appears not proper as the services which have been provided by the BIDCO were already taxed and the claimant was receiving services in a continuous process. Therefore, it appears that the claimant is not entitled for refund of the amount so claimed and such claim is liable to be rejected on the grounds discussed herein above." 9. Eventually, vide Order-in-Original dated 07.06.2017, Adjudicating Authority rejected Appellant's claim primarily on the following grounds- "I also observe that claimant has submitted that service provider has claimed the entire contract value and applicable service tax from them before levying of SBC and KKC and the amount on which Cesses have been paid, were already the adjusted amounts on which due taxes were paid earlier, as such ....
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....entions that legally they are entitled for the refund of such undue service tax deposit in view of service tax provisions read with disclaimer letter from the service provider is not supported with proper and correct evidences in their support, as discussed supra. Therefore, it appears that the claimant is hot entitled for refund of the amount so claimed and such claim is liable to be rejected on the grounds discussed herein above." 10. Aggrieved by the aforesaid Order, Appellant preferred an Appeal before the Commissioner (Appeals), who also vide impugned Order-in-Appeal dated 23.03.2018, affirmed the rejection of claim, though on different grounds as returned in para nos. 4.4.3 to 4.5of Order-in-Appeal which read as under: - 4.4.3 Since, in this case, there is no dispute that M/s BIDCO had provided continuous supply of services, the invoices issued for the progressive works, which required the appellant to make payments to M/s BIDCO, by way of adjustment from the advances, are, thus, required to be considered for the purpose of Rule 5 of the Point of Taxation Rules, 2011, in terms of Rule 4A of the Service Tax Rules, 1994 read with Rule 2(d) of the Point of Taxation Rules, 201....
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....was paid vide challan dated 04.12.2015. Since in this case, refund was filed on 04.01.2017, I find that refund of Swachh Bharat Cess of Rs.2,48,418/- was barred by time limitation." 11. The present Appeal under consideration has been preferred by Appellant against the aforesaid Order-in-Appeal. 12. I find that in terms of Section 66 of Finance Act, 1994 as substituted by Finance Act, 2007, Service Tax was leviable on the value of taxable services enumerated in various clauses of said Section, which, inter alia, included" erection, commissioning, commissioning and installation services" under clause (zzd) and "work contract services" under clause (zzzza). For better comprehension, the provisions of Section 66 are extracted below - "66. Charge of service tax There shall be levied a tax (hereinafter referred to as the service tax) at the rate of twelve per cent of the value of taxable services referred to in sub-clauses ........." Vide the Finance Act, 2012, scope of charge of Service Tax was enlarged vide insertion of Section 66B to include "services provided or agreed to be provided" within the ambit and scope of Service Tax and thus, with effect ....
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....ntinuous supply of service, every person providing such taxable invoice shall issue an invoice, bill or challan, as the case may be, within thirty days of the date when each event specified in the contract, which requires the service receiver to make any payment to service provider, is completed. Provided also that in case the provider of taxable service is a banking company ....... Provided [also] that in case the provider of taxable service is aircraft operator ....... Provided also that wherever the provider of taxable service receives an amount upto rupees one thousand in excess of the amount indicated in the invoice and the provider of taxable service has opted to determine the point of taxation based on the option as given in Point of Taxation Rules, 2011, no invoice is required to be issued to such extent. 14. I further find that with effect from 01.04.2011, Government introduced Point of Taxation Rules, 2011 vide Notification No. 18/2011-ST dated 01.03.2011, defining the point of taxation. The pertinent provisions relevant for present appeal are extracted below- 2. Definitions In these rules, unless the context otherwise requi....
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.... in effective rate of tax], the point of taxation shall be date of payment or issuing of invoice, whichever is earlier; or (ii) where the invoice has also been issued prior to *[change in effective rate of tax] but the payment is received after the*[change in effective rate of tax], the point of taxation shall be the date of issuing of invoice; or (iii) where the payment is also received before the *[change in effective rate of tax,] but the invoice for the same has been issued after the *[change in effective rate of tax, the point of taxation shall be the date of payment; (b) in case a taxable service has been provided after the "[change in effective rate of tax], (i) where the payment for the invoice is also made after the *[change in effective rate of tax] but the invoice has been issued prior to the *[change in effective rate of tax], the point of taxation shall be the date of payment; or (ii) where the invoice has been issued and the payment for the invoice received before the *[change in effective rate of tax], the point of taxation shall be the date of receipt of payment or date of issuance of invoice, whichever is earlie....
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....of the of the aforesaid statutory provisions, I am of the considered opinion that Invoice issued by BIDCO for advance payment qualified as an Invoice under the provisions of Rule 2(d) of POTR, 2011 and Rule 4A(1) of the Service Tax Rules, 1994, 3rd proviso; and thus, BIDCO had correctly charged and collected Service Tax and Cesses as applicable on the date of issuance of 12 + 62 Invoices for such advance payments. It is also evident from appeal paper book that Appellant had paid the Tax + Cesses as applicable to BIDCO, who in turn, had deposited the same with exchequer. Thus, in my considered opinion, advance amount paid by Appellant was Tax paid amount i.e. an amount for rendering of service on which applicable Tax was duly discharged on the date of payment of advance amount by Appellant against which no service was provided on the date of receipt/ payment of aforesaid amount and the service was to be rendered on a later date. 16. I also find that in all the 75 + 61 Invoices issued after introduction of SBC and KKC; and in respect whereof Appellant is claiming refund, BIDCO had adjusted entire value of service quantified in those Invoices against the advance payment received ea....
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....self is not clear date in this case) will apply. We are of the view that during the relevant time the rate that was applicable at the time of receipt of value of service will apply in case where the assessee chose to pay tax on the advance amount received. 13. We also take note that provisions in Rule 4(b)(ii) and Rule 9 of the new Point of Taxation Rules, 2011 as amended by Notification 25/2011-ST dated 30.03.2011 have the same effect as our conclusion. For convenience Rule 9 of the said Rules is reproduced below: '9. Transitional Provisions. - Nothing contained in this sub-rule shall be applicable, - (i) where the provisions of service is completed, or (ii) where invoices are issued prior to the date on which these rules come into force. Provided that services for which provision is completed on or before 30th day of June, 2011 or where the invoices are issued up to the 30th day of June, 2011, the point of taxation shall, at the option of the taxpayer, be the date on which the payment is received or made, as the case may be.' 14. For the reason explained above we allow the appeal with consequential beliefs." (ii) Baja....
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....er, the issue is required to be answered in favour of the assessee. 35. Regarding the second issue, any contract of payment received prior to 1-7-2003 is not the condition for taxing. The tax will be imposed on the payment received thereafter. It is stated that the payment is already received prior to 1-72003. 36. In that view of the matter, the interpretation put forward by the department is required to be reversed. 37. In third appeal, regarding the second issue, in view of the fact that first issue is answered in favour of the assessee, the second issue will not arise. Therefore omission of any issue in the first notice will not come in the way of the department. 38. In that view of the matter, all the issues are required to be answered in favour of the assessee against the department. 39. The appeals stand allowed." (iv) Commissioner of C. Ex., Raipur Vs. Indian Ispat Works (P) Ltd. - 2006 (3) STR 161 (Tri. - Del.) "5. Considered the submission of the DR and perused the records. I find that the Respondents are SSI and were availing Service of the GTO. The department directed them to deposit the Service Tax, though t....
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....und and secondly as this ground was neither taken in the Show Cause Notice nor in the Order-in-Original or at the First Appeal stage and therefore, this being an entirely new ground, cannot be raised at Second Appeal stage. 20. To sum up, I hold that Appellant is entitled to Refund and hence, I allow the appeal with consequential relief, as per law. Sd/- (P. K. CHOUDHARY) MEMBER (JUDICIAL) Difference of Opinion In view of difference in opinion expressed by Member (Judicial) and Member (Technical), following questions are referred to the Hon'ble President for referring the same either by himself or by referring the same to a third member for his opinion on the following questions: - Whether in view of the fact that ST-3 Returns has not been revised or modified till date, the Refund Application cannot be entertained and the same has rightly been rejected by authorities below as held by learned Member (Technical) or under the provisions of the Finance Act, 1994, the Service Tax Rules, 1994 and Point of Taxation Rules, 2011, the amount of SBC and KKC charged by service provider and paid by Appellant was not chargeable and Appellant is entitled to re....
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.... being charged. 3. A Show Cause Notice was issued on 07.03.2017 on the ground that the Appellant has not brought in proper evidence towards SBC/KKC not being leviable in these cases. After due process the Adjudicating Authority rejected the refund of Rs.61,15,061/-. On appeal the learned Commissioner (Appeals) has held that in some cases the Appellant was not at all required to pay SBC/KKC and hence they are not liable for refund claim. In some cases they are not eligible for refund claim on account of their failure to prove that they have not passed on the Service Tax burden to any other person. In some cases they have filed refund claim after one year. On these grounds he rejected the Appeal. Being aggrieved, the Appellant has filed the appeal before the Tribunal. 4. When the matter came up before the Division Bench the issue was argued extensively and the Hon'ble Member (Technical) has held Appellant is not eligible for refund as per the question framed above and Hon'ble Member (Judicial) has held that they are eligible for refund as has been observed in his part of the order. The matter stands referred to me. 5. Learned Advocate appearing on behalf of the appellant sub....
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....e prays that the Appeal may be dismissed, as has been held by Hon'ble Member (Technical). 9. Heard both sides and perused the appeal papers, synopsis and other documents and submissions made by both the sides. 10. I find that the point of difference to me is specifically confined to consider whether the refund claim is to be rejected since ST3 Returns have not been revised/modified by BIDCO as has been held by the Hon'ble Member (Technical) or the amount of SBC/KKC charged by the services provided and paid by the Appellant is not chargeable in terms of the Finance Act 1994, Service Tax Rules 1994, Point of Taxation Rules 2011 and hence they are eligible for refund, as has been held by Hon'ble Member (Judicial). 11. So far as point made by the Hon'ble Member (Technical) is concerned, I do not find any reference whatsoever has been made either in the Show Cause Notice or in the Order-In-Original or in the Order-In-Appeal to the effect that ST-3 Returns have not been revised or modified by BIDCO. Since this was not the ground of Show Cause Notice, the same cannot considered at the Tribunal stage to reject the refund claim on this ground. 12. So far as the stand taken by th....
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....his case the refund claim has been made by the appellant as the person bearing the Service Tax burden. There is nothing to indicate in the Show Cause Notice that the Revenue has any objection on this issue. 14. While no specific point of reference has been made with regard to time bar and unjust enrichment in the point of reference, I find from the order drafted by Hon'ble Member (Technical) that he has also dealt with the issue of unjust enrichment at Para 4.9. After citing several case laws, he concludes at Para 4.10 as under:- "4.10 In view of the above referred decisions of the Hon'ble Supreme Court and High Court we do not find any merits in this appeal. We also do not find that the decision relied upon by the appellant would support their case contrary to the above referred decision." 15. Therefore, I have spent sometime on going though this issue also. 16. On going through the Show Cause Notice I find that the only ground taken therein is as under: "In view of above, it is evident that the claimant is a service recipient and M/s. BIDCO is a service provider. The service provider appears to have provided their services to the service recipient and a....
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....he Tribunal's stage. 18. In view of the above discussions, I hold that the Appellant is eligible for refund. The reference is answered thus. 19. I remit this case back to the Division Bench for subsequent order. (Dictated & pronounced in open court) Sd/- (R. MURALIDHAR) MEMBER (JUDICIAL) In view of the majority order, the appeal is allowed with consequential relief, as per law. (Order pronounced in open court 10.07.2025) Sd/- (P. K. CHOUDHARY) MEMBER (JUDICIAL) Sd/- (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) ============= Document 1 Page No: 1 of Total Page: 2 INVOICE 15 AJAJ INFRASTRUCTURE DEVELOPMENT CO. LTD. NIT- MIRCHIWARA & BURAGAON.DISTT. LALITPUR .: 284403,UTTAR PRADESH BID/LTP/SR/03000254 Invoice No : BILL TO PARTY 16-NOV-15 Date of issue : LALITPUR POWER GENERATION COMPANY LTD (E) Challan No .: 151100018 MIRCHWARA BUROGAON,TEHSIL - MAHRONI Challan Date : 16-NOV-15 Dist. LALITPUR -284403 U45201DL2006PLC223222 CIN :- LALITPUR 09965708898 : Vat/Tin No .: UTTAR PRADESH 09965708898 CST No .: AADCB0423CSD007 S.Tax Ref. No .; PO/LDA/CONTRACT....