9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (6) TMI 499 - AT - Service TaxRefund claim - rejection of the application being pre-mature - consulting Engineers Services - export of services - services rendered by M/s Essar Engineering Ltd. were consumed outside the India - whether the refund claim filed by the appellant could have been returned as premature, when in fact, it was complete in all aspects and no further compliance was lacking at the Appellant s end? - HELD THAT - Section 35(1) of Central Excise Act, 1944 provides for filing appeals before Commissioner (Appeals). This section states that any person aggrieved by any decision or order passed under this Act by a Central Excise officer may appeal to the Commissioner (Appeals). The words used are decision or order . In many judgments, the Tribunal as well as Hon ble High Courts have held that a letter issued informing the decision which affects the right of the assessee can be considered as an appealable order. In the cases of INSTANT CLEARING SERVICES (I) PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS, CHENNAI 2015 (10) TMI 97 - CESTAT CHENNAI , M/S MANDVI CASTING PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, GOA 2011 (4) TMI 577 - CESTAT, MUMBAI and BHAGWATI GASES LTD. VERSUS COMMISSIONER OF C. EX., JAIPUR-I 2008 (1) TMI 712 - CESTAT, NEW DELHI the instances were communications issued by department and the issue for consideration was that can such comunications constitute an appealable order or not. It was held that when such communication/letter affects the right of assessee/party then appeal was maintainable. Once an application of refund has been filed before the refund sanctioning authority, the said authority is duty bound to decide the refund application one way or the other. The refund application can either be rejected or allowed in part or in full. The provisions of refund do not give liberty to the fund sanctioning authority to return the refund application by terming the same to be premature. Therefore the action of the Asstt. Commissioner in holding the application as premature is really an act of refusal to exercise a statutory duty to decide upon the refund application one way or the other. For this reason also, the order of the lower authority is untenable. The grounds for refund have not been considered by both the authorities nor the judgments relied upon by the appellant considered by both the authorities, nor there is any finding distinguishing the same. Thus clearly, there is serious violation of principles of natural justice apparent on the fact of record - if the tax itself is not leviable, it would be immaterial whether the payment for the services is received in Indian Currency or foreign currency. When the services in question were not taxable at all, as they were consumed outside India, the refund claim could not have been returned as premature on the ground that payment for the services were to be received in foreign exchange by M/s EPIL on a future date. Therefore the impugned order in-appeal passed by the Ld. Commissioner in the present matter legally not correct. It is on records that the identified service element has been wholly rendered and consumed abroad. As Hon ble Supreme Court in the case of ISHIKAWAJIMA-HARIMA HEAVY INDUSTRIES LTD. VERSUS DIRECTOR OF INCOME-TAX 2007 (1) TMI 91 - SUPREME COURT held that in respect of offshore services, there should be sufficient nexus between the rendition of services and territorial limits of India. It was held that applying the principle of apportionment to composite transactions which have some operation in one territory and same in other, it is essential to determine taxability of the service operations. Applying this principle, in the present case the whole of service rendered and consumed outside India is beyond the taxable territory as per Finance Act, 1994, hence not liable to service tax. In the present case, the department and both the adjudicating authority nowhere disputed the facts that the services rendered by Appellant to ESML were provided and consumed at a place outside India and therefore, not leviable to Service tax, as the services was provided beyond the territorial jurisdiction of India. Thus, in the instant case, the amount deposited by the appellants without any authority of law cannot be considered as Service Tax. Therefore, the appellant are entitled to get the refund. There are no merits in the impugned order passed by the Learned Commissioner (Appeals) - appeal allowed.
Issues Involved:
1. Whether the refund claim filed by the appellant could have been returned as premature. 2. Whether the services rendered by the appellant were consumed outside India and thus not leviable to Service Tax. 3. Whether the Assistant Commissioner's communication could be considered as an appealable order. 4. Whether the principles of natural justice were violated by not considering the appellant's grounds and judgments. Summary: Issue 1: Premature Refund Claim The appellant argued that the refund claim was complete in all aspects and should not have been returned as premature. The Tribunal found that once a refund application is filed, the authority must decide on it, either rejecting or allowing it. The Assistant Commissioner's action of returning the claim as premature was deemed an act of refusal to exercise a statutory duty, making the order untenable. Issue 2: Services Consumed Outside India The appellant contended that the services rendered were consumed outside India and hence not taxable. The Tribunal agreed, stating that service tax is a destination-based consumption tax, applicable only to services consumed in India. Since the services were consumed by M/s Minnesota Steel Industries, LLC, USA, the tax was not leviable. The Tribunal cited various judgments supporting this view, including Cox & Kings India Ltd. and Ishikawa-Ima-Harima Heavy Industries Ltd. Issue 3: Appealable Order The Tribunal noted that under Section 35(1) of the Central Excise Act, 1944, any decision or order affecting the rights of the assessee can be appealed. The Assistant Commissioner's communication, which affected the appellant's right to a refund, was thus considered an appealable order. The Tribunal referenced several judgments to support this interpretation, including Instant Clearing Services (I) Pvt. Ltd. and Mandvi Casting Pvt. Ltd. Issue 4: Violation of Natural Justice The Tribunal found that both authorities failed to consider the appellant's grounds for refund and the judgments relied upon, constituting a serious violation of principles of natural justice. The Tribunal emphasized that every issue raised must be addressed, especially when supported by documentary evidence. Conclusion: The Tribunal concluded that the services in question were rendered and consumed outside India, making them non-taxable. The appellant was entitled to a refund, and the Assistant Commissioner's order was set aside. The appeal was allowed in favor of the appellant with consequential relief as per law.
|
