TaxTMI 
TaxTMI 
2026 (7) TMI 586
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.... order for Solaris 2.6 and Oracle database software from M/s SAP France SA vide letter date 21/12/1998. The annual maintenance charges (AMC) to be paid to M/s SAP France in Deutsch Mark, as per their quotation dated 09/12/1998. For the said AMC service rendered during the period 2003-2005, service tax was belatedly paid with interest on 23/01/2006. Thereafter, the amount paid was taken as credit during the month of February 2006, under the category of service tax paid on input services. 2. Under Rule 3(1), a manufacturer or producer of final products or a provider of taxable service shall be allowed to take credit on service tax leviable under Section 66A of the Finance Act, 1994 and paid on any input service received by the manufacturer of final product or by provider of output services on or after 19/09/2004. While so, the appellant has taken input credit to a tune of Rs. 2,04,274/- and Education Cess Rs. 1,11,333/- being the service tax paid on annual maintenance charges paid to M/s SAP France SA for the period prior to 10/09/2004. 3. On 05/02/2008, Show Cause Notice issued to the appellant with the following imputations as to why: (a)ineligible Cenvat Credit Rs. ....
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.... Since the said suppression come to knowledge of the department only during the detailed scrutiny of their private records, action under Rule 15(2) read with Section 11 AC was initiated in addition to recovery of ineligible credit taken on the amount of Rs. 2,04,274/- under Rule 14 of Credit Rules, 2004 r/w Section 11 A of the Central Ac,t 1944. 6. The Appellant being aggrieved by the order in Original passed by the Assistant Commissioner, challenged it before the Appellate Tribunal on the ground that the demand raised after two years (i.e) in February 2008 for availing credit in February 2006, was barred by limitation. The service rendered for maintaining computer software prior to 1st, May 2006 does not attract service tax. The services received from abroad are taxable only after insertion of Section 66A of the Finance Act, 1994. Therefore, even assuming that the services were taxable, the appellant is not liable to pay service tax for services rendered only from Abroad and received prior to April 18th, 2006. Having paid the tax by mistake, they had not claimed the refund of the same, but have availed it as Credit, which is not illegal. 7. The Tribunal considering the above....
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....on service tax paid erroneously. Such payments are considered as deposit and the taxpayer is entitled to claim refund. Section 11 A and 11 B of the Central Excise Act, 1944 and the Cenvat Credit Rules for levy, short levy and refund makes it clear that the appellant in this case had wrongly benefited by taking credit of the amount, which is not eligible under the Rules. 12. For easy reference and appreciation of the rival submission, the relevant Sections and Rules prevailed at that time (2003-2005) are extracted below:- Central Excise Act, 1944: Section 11 A: "11A. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded - (1)When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, whether or not such non-levy or non-payment, short-levy or short payment or erroneous refund, as the case may be, as on the basis of any approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods under any other provisions of this Act or the rules made thereunder, a Central Excise Officer may, within [one year] from the relevant date, serve notice on....
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....re it is possible to do so, shall determine the amount of such duty, within a period of one year; and (b)in any other case, where it is possible to do so, shall determine the amount of duty of excise which has not been levied or paid or has been short-levied or short paid or erroneously refunded, within a period of six months. From the date of service of the notice on the person under sub-section (1). (2B)Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person, chargeable with the duty, may pay the amount of duty before service of notice on him under sub-section (1) in respect of the duty and inform the Central Excise Officer of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the duty so paid. Provided that the Central Excise Officer may determine the amount of short payment of duty, if any, which in his opinion has not been paid by such person and, then, the Central Excise Officer shall proceed to recover such amount in the manner specified in this section, and the period of "one year" referred to in....
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....uty-(1)Any person claiming refund of any duty of excise may make an application for refund of such duty to [Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise] before the expiry of [one year] [from the relevant date] [in such form and manner] as may be prescribed and the application shall be accompanied by such documentary or other evidence (including the documents referred to in section 12A) as the applicant may furnish to establish that the amount of duty of excise in relation to which such refund is claimed was collected from, or paid by, him and the incidence of such duty had not been passed on by him to any other person: Provided that where an application for refund has been made before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991, such application shall be deemed to have been made under this sub-section as amended by the said Act and the same shall be dealt with in accordance with the provisions of sub-section (2) substituted by that Act: Provided further that the limitation of [one year] shall not apply where any duty has been paid under protest. [******] (2) If, on receipt o....
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.... to the notification by a resolution moved within a period of fifteen days beginning with the day on which the notification is so laid before the House of the People and if Parliament makes any modification in the notification or directs that the notification should cease to have effect, the notification shall thereafter have effect only in such modified form or be of no effect, as the case may be, but without prejudice to the validity of anything previously done thereunder. (5) For the removal of doubts, it is hereby declared that any notification issued under clause (f) of the first proviso to sub-section (2), including any such notification approved or modified under sub-section (4), may be rescinded by the Central Government at any time by notification in the Official Gazette.] Explanation. For the purposes of this section, - (A) "refund" includes rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India; (B) "relevant date" means, - (a) in the case of goods exported out of India where a refund of excise duty paid is available in respec....
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....were, or are, liable- (i) to duty of excise, in cases where according to the said practice the duty was not, or is not being, levied, or (ii) to a higher amount of duty of excise than what was, or is being, levied, according to the said practice, then, the Central Government may, by notification in the Official Gazette direct that the whole of the duty of excise payable on such goods, or, as the case may be, the duty of excise in excess of that payable on such goods, but for the said practice, shall not be required to be paid in respect of the goods on which the duty of excise was not, or is not being, levied, or was, or is being, short-levied, in accordance with the said practice. (2) Where any notification under sub-section (1) in respect of any goods has been issued, the whole of the duty of excise paid on such goods or, as the case may be, the duty of excise paid in excess of that payable on such goods, which would not have been paid if the said notification had been in force, shall be dealt with in accordance with the provisions of sub-section (2) of Section 11-B: Provided that the person claiming the refund of such duty or, as the ....