2015 (1) TMI 771 - AT - Service Tax

Chartered Accountants Services - Services rendered to Special Economic zone(SEZ) - Held that - Major amount of the demand is involved in respect of rendering of services to Special Economic zone. The adjudicating authority observed that the benefit of amended Rule 6(6A) of CCR 2004 would be available w.e.f. 1.3.2011. We find that Rule 6(6A) of CCR 2004 would be effective retrospectively by Finance Act, 2012 for the period from 10.2.2006 to 28.2.2011. Hence in our considered view, the issue is required to be examined by the adjudicating authority. It is noticed that the Tribunal in the case of National Engineering Industries Ltd. (2011 (9) TMI 759 - CESTAT, NEW DELHI) allowed the appeal on the issue of exporting services with certain directions. We also notice that appellant already deposited some amount against the demand. - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
1. Recall of stay order passed ex parte without hearing on merit.
2. Decision on appeal at the stage of stay petition hearing.
3. Demand of service tax for non-maintenance of separate accounts and non-payment of service tax.
4. Contravention of Rule 6 (3) of Cenvat Credit Rules, 2004.
5. Applicability of amended Rule 6 (6A) of CCR 2004 retrospectively.
6. Remand of the matter to the adjudicating authority for fresh examination.

Analysis:

1. The judgment addressed the issue of recalling a stay order passed ex parte without hearing on merit. The Tribunal, after perusing the application, recalled the stay order and restored the stay petition to its original number based on the reasons mentioned for non-appearance by the applicant. The MISC application for recalling the stay order was allowed.

2. The judgment also dealt with the decision on the appeal at the stage of stay petition hearing. After hearing the stay petition at length, the Tribunal decided that the appeal may be decided during the stay petition hearing itself. Therefore, the Tribunal disposed of the stay application and proceeded to hear and dispose of the appeal.

3. The appellants were engaged in providing taxable services under the category of Chartered Accountants Service. The adjudicating authority confirmed the total demand of tax for non-maintenance of separate accounts for inputs services used towards taxable and non-taxable services, as well as non-payment of service tax claimed as export of service. The judgment detailed the amounts confirmed for demand of tax and interest for specific periods.

4. The judgment discussed the demand of tax related to rendering services to a Special Economic Zone for contravention of Rule 6 (3) of Cenvat Credit Rules, 2004. The appellant argued for the applicability of an amendment to Rule 6 (6A) of CCR 2004 retrospectively and cited a Tribunal decision for consideration of export of services and reimbursement of expenses.

5. Regarding the applicability of the amended Rule 6 (6A) of CCR 2004 retrospectively, the Tribunal found that the benefit of the amendment would be available from a specific date. The judgment highlighted the need for the issue to be examined by the adjudicating authority in light of the retrospective effect of the amendment and relevant Tribunal decisions.

6. Ultimately, the judgment remanded the matter to the adjudicating authority for fresh examination and decision on all issues in accordance with the law, considering the Amendment of Rule 6 (6A) of CCR 2004 by Finance Act, 2012, and the Tribunal's decision. The adjudicating authority was instructed to provide proper hearing before making a decision, and the appeal was allowed by way of remand. The stay application was disposed of accordingly.