9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (6) TMI 745 - AT - Service TaxDemand of service tax - reverse charge - revenue neutral issue - extended period of limitation - The appellant had received services of Back End Operations such as payrolls and finance input services from its related party AirAsia Global Shared Services (AGSS, for short) which is located outside India - HELD THAT - In the present case, it is not disputed that the appellant is receiving the services of back-end operation such as payroll and finance from their related party AGSS which is located outside the taxable territory of India. It is also not disputed that the services received by the appellant is an input service and service tax is paid under reverse charge mechanism. Further it is found that the appellant submitted a certificate dt. 01.10.2018 of M/s. MOJ Associates, Chartered Accountants certifying the remittance of taxes under reverse charge mechanism for the receipt of services from AGSS for the financial years 2013-14 to 2017-18. The said certificate mentions that the payment of service tax on business support service received from AGSS made on accrual of invoices. Extended period of limitation - HELD THAT - Both the authorities have not considered the ratio of the decision in the case of JET AIRWAYS (I) LTD. VERSUS COMMISSIONER OF SERVICE TAX, MUMBAI- (VICE-VERSA) 2016 (12) TMI 934 - CESTAT MUMBAI decided by the Tribunal which was upheld by the Hon ble Apex Court in JET AIRWAYS (INDIA) LTD. VERSUS COMMISSIONER 2018 (1) TMI 210 - SC ORDER which is clearly applicable in the facts and circumstances of the present case. It is also found that the Commissioner(Appeals) in the impugned order has wrongly relied upon the ratio laid down by the Apex Court in the case of BALWANT SINGH VERSUS JAGDISH SINGH 2010 (7) TMI 556 - SUPREME COURT wherein the facts of those cases are entirely different from the facts of the present case - The decision of Balwant Singh deals with the condonation of delay while the present case deals with the concept of revenue neutrality with regard to service tax remitted under reverse charge mechanism. The extended period of limitation has wrongly been invoked by the Revenue in the present case because the appellant has not concealed any material fact and has been filing the return regularly and paying the service tax under reverse charge mechanism and has been cooperating with the Department by providing various information and documents - the invocation of extended period of limitation is not sustainable in law. Revenue Neutrality - HELD THAT - The issue of revenue neutrality has also been clarified by the CBEC vide Circular No.354/148/2009-TRU dt. 16/07/2009 wherein it has been clarified that the service tax paid by a service recipient on reverse charge basis would also qualify as input service for availment of cenvat credit Regarding the demand of the appellant seeking refund of ₹ 20,91,847/- paid post-01.07.2017, both the authorities have not considered the claim of the appellant on merits and therefore it is not desirable for me to give a finding on the request of the appellant to grant refund. The appellant has to file a refund claim as per law and in the present appeal, the refund cannot be granted to the appellant - Appeal disposed off.
Issues:
1. Whether the demand of service tax is sustainable when the issue is revenue neutral. 2. Whether the extended period of limitation has been rightly invoked. 3. Whether the appellant is entitled to a refund of the service tax paid post-01.07.2017. Analysis: Issue 1: The appellant received services from a related party located outside India, subjected to service tax under reverse charge mechanism. The Assistant Commissioner restricted the demand to the extent of tax already paid, dropping interest and penalty based on the principle of revenue neutrality. The Commissioner(Appeals) rejected the appeal, leading to the present case. The appellant argued for revenue neutrality citing various judgments. The Tribunal found that the service tax liability was discharged under reverse charge mechanism, making the situation revenue neutral. The Commissioner(Appeals) erred in relying on irrelevant judgments, ignoring the applicable Jet Airways (India) Ltd. decision upheld by the Supreme Court. The Tribunal held in favor of the appellant, setting aside the impugned order based on the doctrine of revenue neutrality. Issue 2: The appellant contested the invocation of the extended period of limitation, arguing no concealment of material facts and regular filing of returns. The Tribunal agreed, stating that the extended period was wrongly invoked as the appellant cooperated with the Department, making the invocation unsustainable in law. Issue 3: Regarding the refund claim of &8377; 20,91,847/- paid post-01.07.2017, both authorities did not consider the claim on merits. The Tribunal refrained from granting a refund in the present appeal, advising the appellant to file a refund claim as per the law. The Tribunal disposed of the appeal, not granting the refund in this instance. In conclusion, the Tribunal allowed the appeal based on the doctrine of revenue neutrality, set aside the impugned order, and found the invocation of the extended period of limitation unsustainable. The Tribunal did not grant the refund sought by the appellant for the amount paid post-01.07.2017, advising the appellant to file a refund claim following the legal procedure.
|
