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2023 (11) TMI 886 - AT - Central ExciseValidity of confirmation of demand towards reversal of Cenvat Credit - - Benefit of exemption - confirmation of demand against services provided to National Financial Corporation which was not listed in schedule to Section (3) of United Nations (Privileges and Immunities) Act, 1947 - HELD THAT - Tribunal while deciding the appeal for earlier period has stated In para 7 of M/S ICRA MANAGEMENT CONSULTING SERVICE LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE S.T., GHAZIABAD 2019 (3) TMI 1230 - CESTAT ALLAHABAD demand upholding the reversal of credit of Rs 2,12,309 the penalty imposed equal to this amount has been set aside. Appellant vide his letter dated 07/11/2023 informs that they has reversed the Cenvat credit amounting to Rs.2,65,723/- in terms of provisions of Rule 6 of the Cenvat Credit Rules, 2004. Further, it is informed that the said reversal of credit had already been intimated to the Service Tax Department vide letter(s) dated 29.06.2015 and 23.06.2016. However it is also noted that taking note of the above revenue has not given any demand in respect of this amount in the present statement of demand, nor any penalty has been imposed corresponding to this amount. There are no reason to differ from the above order, as the show cause notice also do not give any ground except that it was an statement of demand on the basis of earlier show cause notice. Impugned order is set aside - appeal allowed.
Issues involved:
The issues involved in this judgment include the retrospective applicability of exemption under Section 3 of the UN Act, the relevance of previous judgments in similar cases, and the imposition of service tax, interest, and penalties on services provided to international organizations. Retrospective Applicability of Exemption: The Commissioner (Appeals) confirmed the demand for services provided to the International Finance Corporation (IFC) from January 2015 to March 2016, as the exemption under reference was available only from 13.07.2016. The judgment emphasized that notifications granting exemptions should be construed strictly and prospectively, without retrospective applicability. Therefore, the demand of service tax on services provided to the IFC during the mentioned period was rightly confirmed under Section 73 of the Act along with interest under Section 75. Relevance of Previous Judgments: The appellant relied on a CESTAT judgment in the case of Coastal Gujarat Power Ltd., which was not accepted by the Department as it was under appeal in the Apex Court. The judgment also distinguished the Final Order in the case of M/s AC Nielson Org. Marg Pvt. Ltd., stating that it was not applicable as it considered the IFC as part of the UN, while the IFC was a member of the World Bank Group. Therefore, the ratio of previous judgments could not be considered in the instant case. Imposition of Service Tax, Interest, and Penalties: The Order-in-Original confirmed the demand for services rendered to the IFC and imposed interest and penalties accordingly. The demand for services provided to other organizations like UNICEF, World Bank, and Asian Development Bank was dropped. The Commissioner (Appeals) dismissed the appeal, leading the appellant to file an appeal before the Tribunal. The Tribunal, after considering the impugned orders and submissions, allowed the appeal, setting aside the impugned order and confirming the demand in respect of services provided to the IFC. Conclusion: The Tribunal allowed the appeal, emphasizing the importance of strict interpretation of exemptions and the non-applicability of certain judgments in the present case. The judgment highlighted the specific period for which the exemption was available and upheld the demand for services provided to the IFC during that period. The decision serves as a precedent for cases involving the retrospective applicability of exemptions and the relevance of previous judgments in tax matters.
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