2019 (8) TMI 1489 - AT - Service Tax

Scope of SCN - Refund of Excise Duty - applicability of time limitation prescribed under section 11(B) of the Central Excise Act - the Assistant Commissioner went beyond the scope of SCN - HELD THAT - It was imperative for the Commissioner to have confined himself to the issue raised in the show cause notice but what transpires from the Order passed by the Commissioner is that the Commissioner instead of examining this limited issue relating to limitation went beyond the show cause notice and in fact went to the extent of observing that it was necessary for the adjudicating authority to have examined whether the supply by the Appellant qualifies export of goods - the show cause notice did not call upon the Appellant to submit a reply on this issue and in fact proceeded on the footing that the sale of goods by a duty free shop to outbound international passengers was export of goods . This was not even the allegation in the show cause notice and in fact the show cause notice proceeded on the footing that the Appellant qualified as an exporter of goods. In the earlier paragraphs of this order it has been held that the adjudicating authority or the appellate authority cannot go beyond the allegations contained in the show cause notice. It would, therefore, not be necessary to consider the submission of the learned Authorized Representative of the Department - Appeal allowed - decided in favor of appellant.

Issues Involved:
1. Eligibility for refund of Service Tax, Krishi Kalyan Cess, and Swachh Bharat Cess.
2. Applicability of the limitation period under Section 11B of the Central Excise Act, 1944.
3. Whether the sale at duty-free shops qualifies as "export of goods."
4. Examination of unjust enrichment.
5. Whether the Commissioner (Appeals) can go beyond the show cause notice.

Detailed Analysis:

1. Eligibility for Refund of Service Tax, Krishi Kalyan Cess, and Swachh Bharat Cess:
The Appellant operates duty-free shops at IGI Airport, New Delhi, and entered into a License Agreement with Delhi International Airport Ltd. (DIAL) for services in the Customs Area. The Appellant filed refund applications under Section 11B of the Central Excise Act, 1944, claiming that the services provided by DIAL in the duty-free area were not subject to Service Tax, Krishi Kalyan Cess, or Swachh Bharat Cess, as per the Tribunal's decision in Commissioner of Service Tax-VII, Mumbai v/s M/s Flemingo Duty Free Shop Pvt. Ltd., 2018 (8) GSTL 181 (Tri-Mumbai). The Assistant Commissioner sanctioned a partial refund but denied ?12,77,92,894/-, leading to the present appeal.

2. Applicability of the Limitation Period under Section 11B:
The show cause notice issued to the Appellant stated that the refund claims for the period prior to 31 January 2017 were barred by limitation under Section 11B of the Excise Act. The Assistant Commissioner held that the relevant date for determining the limitation period would be the date of payment of tax, and since the refund applications were filed on 31 January 2018, only claims for taxes paid after 1 February 2017 were eligible for a refund. The Appellant argued that the limitation period should not apply as the amounts were collected without authority of law.

3. Whether the Sale at Duty-Free Shops Qualifies as "Export of Goods":
The Assistant Commissioner, relying on the Supreme Court's decision in Hotel Ashoka v/s Assistant Commissioner of Commercial Taxes 2012 (276) ELT 433 (SC), treated the sale of goods by duty-free shops to outbound international passengers as "export of goods." However, the Commissioner (Appeals) found that this issue was not examined in the Assistant Commissioner's order, rendering it a non-speaking order. The Commissioner remanded the case for re-examination, considering the Madhya Pradesh High Court's decision in Vasu Clothing Pvt. Ltd. v/s Union of India 2019 (22) GSTL 163 (MP), which held that duty-free shops are within taxable territory.

4. Examination of Unjust Enrichment:
The Assistant Commissioner concluded that the issue of unjust enrichment was not applicable to the Appellant's refund claims. This aspect was not contested in the appeal.

5. Whether the Commissioner (Appeals) Can Go Beyond the Show Cause Notice:
The Tribunal held that the Commissioner (Appeals) erred by going beyond the show cause notice, which only addressed the limitation issue and not whether the Appellant was engaged in export of goods. The Tribunal emphasized that an appellate authority cannot make a new case beyond the show cause notice and that the Appellant cannot be placed in a worse position due to the appeal.

Conclusion:
The Tribunal set aside the Commissioner's order and allowed the appeal, granting the Appellant a refund of ?12,77,92,894/-, as the limitation period under Section 11B did not apply to amounts collected without authority of law. The Tribunal relied on precedents, including the Delhi High Court's decisions in Alar Infrastructure Pvt. Ltd. and Hind Agro Industries Ltd., which held that when services are not liable to Service Tax, the limitation period for refunds under Section 11B does not apply.

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