TaxTMI 
TaxTMI 
2025 (1) TMI 1775
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.... ST/70152/2021 Oct 2011-Dec 2011 51/AC/DIV-IV/N/2018-19 34,59,763 ST/70153/2021 Apr 2010-Jun 2010 49/AC/DIV-IV/N/2018-19 6,21,724 ST/70154/2021 Jan 2012-Mar 2012 39/AC/DIV-IV/N/2018-19 35,78,925 ST/70155/2021 Jan 2010-Mar 2010 48/AC/DIV-IV/N/2018-19 6,35,452 ST/70156/2021 Oct 2012-Dec 2012 41/AC/DIV-IV/N/2018-19 66,58,217 ST/70157/2021 Jan 2013-Mar 2013 43/AC/DIV-IV/N/2018-19 68,87,459 2.1 Appellant is registered for providing output services namely "Business Auxiliary Service", "Business Support Services", "Commercial Training & Coaching". "Information Technology Software Services", "Management Consultants" and "Maintenance or Repair Service" ete which are taxable under Section 65 (105) of the Finance Act, 1994. The appellant was availing facility of Cenvat Credit in respect of input Services used in providing output services, under Cenvat Credit Rules, 2004 to their overseas clients and have also DTA Clearances. The appellant filed refund claim for refund of unutilized Cenvat credit of service tax paid on input services during the period as detailed bellow:- Period Date of Filing Amount of Refund ....
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....r the Orders detailed in table below: Period Order in Original No Date Amount Rejected Oct 2011-Dec 2011 51/AC/DIV-IV/N/2018-19 28.03.2019 3724254/- Apr 2010-Jun 2010 49/AC/DIV-IV/N/2018-19 28.03.2019 1806384/- Jan 2012-Mar 2012 39/AC/DIV-IV/N/2018-19 28.03.2019 4866260/- Jan 2010-Mar 2010 48/AC/DIV-IV/N/2018-19 28.03.2019 1458339/- Oct 2012-Dec 2012 41/AC/DIV-IV/N/2018-19 28.03.2019 9253219/- Jan 2013-Mar 2013 43/AC/DIV-IV/N/2018-19 28.03.2019 9787142/- 2.5 By denying the Cenvat credit and consequently the refund claim to the extent indicated in these orders, appellant filed appeal before the Commissioner (Appeals) which has been disposed of by the impugned order as indicated in para-1 above. 2.6 Aggrieved appellant have filed this appeal. 3.1 We have heard Shri Atul Gupta learned Counsel appearing for the appellants and Shri Manish Raj learned Authorised Representative appearing for the revenue. 3.2 Arguing for the appellant learned Counsel submits that- ⮚ The show cause notice suffers from vagueness as it has failed to provide reasons for denial of credit or r....
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....een issued to the appellant for denial of the Cenvat credit and recovery of the same. The Tribunal has constantly taking the view that in the proceeding of refund under Rule 5, the Cenvat credit could not have been denied without issuance of show cause notice under the said rule. 4.3 In the case of Commissioner of Central Excise Vs M/s HCL Comnet Systems and Services 2017 (12) TMI 1661-Allahabad High Court, Hon'ble Allahabad High Court has held 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 no valid show cause notice was issued to the appellant to recover the CENVAT credit before disallowing the refund claimed by the assessee. The Tribunal has placed reliance on Rule 14 of the CENVAT Credit Rules, 2004, which reads as under: "RULE 14. Recovery of CENVAT credit wrongly taken or errone....
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....t. Further, there is no restriction in Rule 5 of the Credit Rules from taking refund of the Cenvat credit claimed by an SEZ unit. An exporter has an option to claim refund of the service tax paid on services procured by its SEZ unit under the Refund Notification or the Notification No 17/2011-ST Dated 1 March 2011 (SEZ Refund Notification as amended). The contention of the appellant is not valid. I find that one unit of the appellant is working in a Special Economic Zone (SEZ) and the appellant took Cenvat Credit at Noida on the basis of invoices issued by the service providers for providing services to their SEZ unit. As per Notification No. 40/2012ST dated 20 06.2012, the taxable services to be provided to the SEZ and consumed wholly within the said SEZ for authorized operation are exempted from payment of Service Tax. However, the said Notification allows to pay Service Tax on the Specified taxable services used outside the SPZ, and to claim refund thereof. The SEZ unit can neither take Cenvat Credit on taxable services nor claim refund of Service Tax in any other Notification except Notification No. 40/2012-ST dated 20.06.2012. Therefore, Service Tax Credit taken by the appella....
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....nt was a SSI Unit and covered under the Notification No. 1/93 and clearance of goods up to a value of Rs. 30 lakhs was exempted from payment of duty, the benefit of Modvat scheme could not be availed in terms of Rule 57C is counter-productive and not beneficial for the respondent-assessee. It works against them and makes them in-competitive and places them at a disadvantage. 19. Thus, the stand of the Revenue is not sustainable. The object of the Modvat Scheme is to reduce cost of final product by taking credit for the duty paid on the inputs [Ichalkaranji Machine Centre (P) Ltd. (supra)]. The object of the exemption notification is to grant benefit to the SSI Units for clearing goods without payment of duty up to a particular limit. 20. Both the Modvat scheme and the exemption notifications are beneficial legislation. The beneficial notification have to be strictly initially but liberally interpreted. 21. If the interpretation of the Revenue is to be accepted that there was no choice to SSI Units to either avail the Modvat Scheme or the benefit of the exemption notification, then the SSI units are prejudiced and may even become unviable. The purpose of t....
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....ly sought to forego the benefits of the exemption notification available to SSI Units. 27. The assessee in our view would have the option either to avail the exemption under the exemption notification or to pay duty on the final product by taking Modvat credit on inputs in terms of Rule 57A of the Rules." (emphasis supplied) 10. The same view was taken by the Karnataka High Court in Commissioner of Central Excise, Bangalore-II vs. Federal Mogul TPR India Ltd.7 in the context of an Exemption Notification issued under section 93(1) of the Finance Act. The assessee had not taken the benefit of the Exemption Notification and had instead taken CENVAT credit of the tax paid inputs. The relevant portion of the judgment is reproduced below : "9. A bare reading of this notification denotes that this notification is issued under Section 93(1) of the Finance Act, 1994 which exempts the taxable services of production of goods on behalf of the principal manufacturer from the whole of service tax leviable under Section 66 of the Finance Act. However, this exemption notification is subject to the condition that the said exemption shall apply only in cases where such ....
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....e contention urged on behalf of the Department that the FMGIL having wrongly paid service tax has consequently passed an inadmissible CENVAT credit amounting to Rs. 2,02,00,275/- to the principal manufacturer, i.e., FMTPR much against the exemption Notification No. 8 of 2005 is not worthy of acceptance. As we have already discussed, the Notification No. 8 of 2005 is a conditional notification and Section 5A(1A) of Central Excise Act, 1944, is not applicable to the present case." 11. In the present case also the Exemption Notifications dated 01.03.2011 and 30.06.2012, granted only conditional exemption from payment of service tax. The appellant could, therefore, forego such exemption and claim benefit of CENVAT credit on the same amount of service tax paid on input services as would have been available as refund to an SEZ Unit. 12. It is true that the Notification dated 10.07.2013, which superseded the earlier Exemption Notifications dated 01.03.2011 and 20.06.2012, contained similar provisions as in the earlier Notifications and also extended similar benefit by way of refund of the service tax paid on input services used for authorized operations of an SEZ Unit an....
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.... confer benefit which is covered by the first Notification No. 132. If the interpretation as sought by the Revenue is to be accepted the preceding period has to be excluded. Substituted para 4 has two parts, first `where production during three preceding year was nil' and second part, `the entire production during May to September, 1982 will be exempted.' Appellant case is covered under both parts. Its production in the last three preceding years was nil and in terms of Notification 132 read with this substituted para 4, in terms of 2nd part the entire sugar produced during May to September, 1982 would exempt. Thus the interpretation for revenue cannot be accepted as it defeats the very object of the Notification." 14. Reliance placed by learned authorized representative on the judgment of the Supreme Court in Krishi Upaj Mandi Samiti is misplaced. Paragraph 8 of the judgment on which reliance has been placed as reproduced below: "8. The exemption notification should not be liberally construed and beneficiary must fall within the ambit of the exemption and fulfill the conditions thereof. In case such conditions are not fulfilled, the issue of application of the no....
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....e time the factum of receipt of these services by the SEZ unit is not disputed the denial of refund of service tax paid on any service received by such unit would be contrary to the provisions of Article 265 of the Constitution. In the present case revenue has not disputed the receipt of these services by the SEZ Unit, hence denial of the refund claim in respect of these three services for the reason that they did not find mention in the list of specified services approved by the SEZ authority cannot be upheld. 4.5 We also find that the issue involved in the present appeal is no longer res-integra. Similar view has been expressed by the tribunal in following cases A. In case of Metlife Global Operations Support Center (P) Ltd. [2021 (46) GSTL 418 (T-Del)] following has been held: "40. This issue relates to proviso (a) of the notification dated March 3, 2009. It provides that the Developer or Units of SEZ shall get the list of services specified in Section 65(105) of the Finance Act as are required in relation to the authorized operations in the SEZ, approved from the UAC. 41. It has been pointed out by Learned Counsel for the appellant that the o....
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.... not produced the approved list of specified input services from the UAC to SEZ which is a mandatory condition as per the Commissioner (Appeals). In reply to this argument, the Learned Counsel submitted that in view of the settled legal position by various decisions relied upon by him, condition in respect of approval from UAC of SEZ is not a mandatory requirement as the SEZ Act vide Section 51 of SEZ Act will have overriding effect over the provisions of any other law. Therefore, keeping in view, the intention of the Government in enacting the SEZ Act and giving special fiscal concessions to SEZs, I am of the considered opinion that this is only a procedural and is not a mandatory condition as held by the Commissioner (Appeals). Further the decisions relied upon by the appellant clearly hold that the SEZ Act has a overriding effect over other laws. Therefore, this ground on the basis of which refund claims have been rejected is not tenable in law." (emphasis supplied) 46. In M/s. ONGC Mangalore Petrochemicals Limited v. Commissioner of Central Excise & Central Tax, Mangalore Commissionerate [2019-VIL-140-CESTAT-BLR-ST], the Tribunal again held : "6. Afte....
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....fication No. 9/2009 as amended. As per the notification, exemption is allowed in relation to authorised operations in SEZ, provided the developer or units of SEZ shall get the list of services which are required in relation to the authorised operations approved from the Approval Committee. The appellant although requested for approval of 106 services initially, the Assistant Commissioner had approved only 37 services which was only default list or rather a general list applicable to all SEZ. It is seen that Development Commissioner has approved the list including Renting of Immovable Property Services vide letter dated 15-92009. It is not disputed that Renting of Immovable Property Service was availed by the appellant for the disputed period. The invoices shows the payment of service tax on such services. The Approval Committee has approved such services vide their letter dated 15-92009. The requisite for obtaining approval is only a procedure to be complied with, for the substantive benefit of exemption from payment of service tax. When the services have been approved, the benefit of exemption cannot be denied. Section 26 of the SEZ Act, lays down provisions for exemption from dut....
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....emption from service tax under Chapter-V of the Finance Act, 1994 on taxable services provided to a Developer or Unit to carry on the authorised operations in a Special Economic Zone; 37. Thus, Section 26(1) of the SEZ Act is inconsistent with the three charging sections viz., Section 3 of the Central Excise Act, 1944, Section 12 of the Customs Act, 1962 and Sections 66, 66A and 66B of Chapter V of the Finance Act, 1994. In addition to the general principle of a specific law (pertaining to SEZ) prevailing over the general law (levying customs, central excise or service tax) and the later enactment (such SEZ Act, 2005) prevailing over the earlier enactments (Central Excise Act, 1944, Customs Act, 1962 and Finance Act, 1994), in the SEZ Act, the Parliament has explicitly resolved this inconsistency between the laws. Section 51 of the SEZ Act states that the provisions of SEZ Act override any other provisions of other laws. It reads as follows : 51.(1) The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than thi....
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...., upon scrutiny, was found to have been verified only on 14th June 2011. It is further alleged that the appellant herein, for the period from 1st July 2012 to 31st March 2013 had availed of exemption against form A-I which, having been dated only on 29th August 2012, precluded the privilege between 1st July 2012 and 28th August 2012 during which taxable service valued at Rs. 12,92,07,189 was rendered without discharging liability of Rs. 1,59,70,009. In sum, the recovery of Rs. 11,59,10,135 was ordered on account of breach of condition in the respective notifications embodying the procedure by which the appellant could have availed exemption from service tax on supply of services to units in Special Economic Zones (SEZ). .... 6. The issue to be decided on this appeal is plain and simple enough: whether the notifications relied upon by the adjudicating authority can invalidate exemption accorded under : '26. (1) Subject to the provisions of sub-section (2), every Developer and the entrepreneur shall be entitled to the following exemptions, drawbacks and concessions, namely : - (a) exemption from any duty of customs, under the Customs Act, 1962 or t....
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.... virtue of any law other than this Act.' of Special Economic Zones Act, 2005 that no other law can prevail over it. 7. It is on record that the required documentation was not available for the entire period of the dispute but, at the same time, it cannot be denied that at some point, the eligibility did exist. The procedural infirmities, for a shorter or longer time, does not in any way supplant the exemption accorded to the impugned supply of services. Furthermore, the findings of the adjudicating authority do not arrive at a conclusion that, but for the said procedural infirmities, the eligibility of the appellant to render such services without payment of tax was in question. In the light of decision cited supra, the overriding nature of the exemption afforded by Section 26 of Special Economic Zones Act, 2005 and the breach of conditions being procedural, we have no hesitation in setting aside the demand pertaining to the rendering of services to M/s. Credit Suisse Service (India) Pvt. Ltd." 4.8 In view of the above, we do not find any merits in the findings recorded in para No.5.1 of the impugned order and set aside the same. Having set aside the para 5.1 of the imp....
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....tion 11BB of the Act becomes payable. 10. It is a well settled proposition of law that a fiscal legislation has to be construed strictly and one has to look merely at what is said in the relevant provision; there is nothing to be read in; nothing to be implied and there is no room for any intendment. [See: Cape Brandy Syndicate v. Inland Revenue Commissioners, [1921] 1 K.B. 64 and Ajmera Housing Corporation & Anr. v. Commissioner of Income Tax, (2010) 8 SCC 739]. 11. At this juncture, it would be apposite to extract a Circular dated 1st October 2002, issued by the Central Board of Excise & Customs, New Delhi, wherein referring to its earlier Circular dated 2nd June 1998, whereby a direction was issued to fix responsibility for not disposing of the refund/rebate claims within three months from the date of receipt of application, the Board has reiterated its earlier stand on the applicability of Section 11BB of the Act. Significantly, the Board has stressed that the provisions of Section 11BB of the Act are attracted "automatically" for any refund sanctioned beyond a period of three months. The Circular reads thus : "Circular No. 670/61/2002-CX, dated 1-10- 20....
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.... from 26th May 1995, the department has maintained a consistent stand about its interpretation. Explaining the intent, import and the manner in which it is to be implemented, the Circulars clearly state that the relevant date in this regard is the expiry of three months from the date of receipt of the application under Section 11B(1) of the Act. 13. We, thus find substance in the contention of learned counsel for the assessee that in fact the issue stands concluded by the decision of this Court in U.P. Twiga Fiber Glass Ltd. (supra). In the said case, while dismissing the special leave petition filed by the revenue and putting its seal of approval on the decision of the Allahabad High Court, this Court had observed as under : "Heard both the parties. In our view the law laid down by the Rajasthan High Court succinctly in the case of J.K. Cement Works v. Assistant Commissioner of Central Excise & Customs reported in 2004 (170) E.L.T. 4 vide Para 33 : "A close reading of Section 11BB, which now governs the question relating to payment of interest on belated payment of interest, makes it clear that relevant date for the purpose of determining the li....