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TMI Blog2011 (10) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... education cess had been paid. As the output services had been exported, they filed two rebate claims - first rebate claim dated 15.12.2005 for an amount of Rs.1,98,24,267/- for the period 16.03.2005 to 30.09.2005 and second rebate claim dated 17.03.2006 for an amount of Rs.1,45,03,718/- for the period from 1.10.2005 to 31.12.2005 for rebate of service tax including education cess paid on input services used in providing the output services, which had been exported in terms of the provisions of Rule 3 of the Export Services Rules, 2005. These rebate claims were filed in accordance with the provisions of Rule 5 of the Export Services Rules, 2005 read with Notification No.12/2005-ST dated 19.04.2005. 1.1 The jurisdictional Dy. Commissioner, Service Tax, however, rejected both the rebate claims on the grounds that - (a) the appellant have not followed the procedure prescribed for claiming rebate as prescribed in the Notification No.12/2005-ST issued under Rule 5 of the Export of Service Rules, 2005 inasmuch as no declaration under para 3.1 of the Notification was filed; and (b) they did not obtain the service tax registration under the Service Tax Rules. 1.2 The appeals filed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gement of the Hon'ble Punjab & Haryana High Court is squarely applicable to the facts of this case and in view of the settled legal position on this issue, the impugned order upholding the rejection of their rebate claims for not filing the declarations prior to export of services is not sustainable. 4. Shri R.K. Gupta, the ld. Senior Departmental Representative, defended the impugned order by reiterating the findings of the Commissioner (Appeals) in the impugned order and pleaded that in this case during the period of dispute to which rebate claims pertained, the appellant has neither obtained service tax registration nor had filed necessary declarations prior to the export of services required under para 3.1 of the Notification No.12/2005-ST, that when in terms of the Notification No.12/2005-ST dated 19.04.2005 a declaration regarding the description, quantity, value, rate of duty and duty payable on inputs actually required to be used and description, value and amount of service tax & education cess payable on input services was required to be filed before the export of service and this declaration was required to be verified by the jurisdictional Assistant /Deputy Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther ground on which the rebate claims has been rejected, under Rule 5 of the Export of the Services Rules, 2005, where any taxable service is exported, the Central Government may, by notification grant rebate of service tax paid on such taxable service or service tax or duty paid on inputs or input services, as the case may be, used in providing such taxable services and the rebate shall be subject to such conditions or limitations, if any, and fulfillment of such procedure, as may be specified, in this notification. Thus, this rule provides for - (a) rebate of service tax on any service exported and' (b) rebate of service tax paid on any input services and or central excise duty paid on any inputs used in providing the output services which had been exported. This rebate is subject to the conditions and limitation prescribed and following the procedure prescribed in the notification issued under this rule. 6.1 Notification No.12/2005-St dated 19.04.2005 issued under Rule 5 of the Export of the Service Rules prescribes procedure for grant of rebate of excise duty paid on inputs and of service tax and education cess paid on input services used in providing taxable services, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Indian Aluminium Company Ltd. vs. Thane Municipal Corporation reported in 1991 (55) ELT 454 has held that not observing even a procedural condition is not to be condoned if such non-observance facilities commission of fraud and introduces administrative inefficiency and inconvenience. In this case, the Hon'ble Supreme Court observed that having failed to file the necessary declaration, the petitioner cannot claim concession and ask the authorities to make verification of the some records, as the verification at the time when the raw material was still there, is entirely different from the verification at a belated stage after it has ceased to be there, may be that the raw material was used in the industrial undertaking as claimed by the petitioner company or it may not be, and in any event, the failure to file the necessary declaration prevented authorities to have a proper verification. In this regard, para 3 to 7 of the judgement are reproduced below: "3. The amended Rules came into force in 1970. Rule 4(2) provides for payment of octroi at a lower rate by certain industrial undertakings in respect of the goods mentioned in Part IA of Schedule II to the Rules. Aluminium is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h procedural. The learned Counsel, however, submitted that even now the authorities can verify the necessary records which are audited and submitted to the authorities and find out whether the material was used in its own undertaking or not. We do not think we can accede to this contention. Having failed to file the necessary declaration he cannot now turn around and ask the authorities to make a verification of some records. The verification at the time when the raw material was still there is entirely different from a verification at a belated stage after it has ceased to be there. May be that the raw material was used in the industrial undertaking as claimed by the petitioner Company or it may not be. In any event the failure to file the necessary declaration has necessarily prevented the authorities to have a proper verification. 4. Shri Ganesh, learned Counsel for the petitioner Company relied on the judgment of this Court in Kirpal Singh Duggal v. Municipal Board, Ghaziabad in support of his submission that the non-fulfilment of procedural requirement does not bar the claimant from pursuing his remedy in a court of law. That was a case where the appellant entered into a cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry obligation once the procedure followed is fulfilled and if it is not fulfilled the Municipality may decline. The granting of a certificate that the appellant used the goods for Government work made all the difference. But, in the instant case, the non-fulfilment of the requirement even though procedural, has disentitled the petitioner Company because there was no way to verify whether it was entitled for such concession. In HMM Limited and Another v. Administrator, Bangalore City Corporation and Another no doubt the view taken in Duggal's case was confirmed but it does not make any difference so far as the present case is concerned for the reasons stated above. In that case the question was whether the goods namely Horlicks was consumed within the city or not and there was no dispute as to the quantum which was credited pursuant to the directions of the High Court. Hence no further verification was necessary. Therefore these two cases are distinguishable. 5. However, a concession has to be availed at the time when it was available and in the manner prescribed. The common dictionary meaning of the word "concession" is "the act of yielding or conceding as to a demand or argument, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In effect the proviso says that part of the turnover of the selling dealer covered by the terms of sub-clause (ii) will be exempted provided a declaration in the form prescribed is furnished. To put it in other words, a dealer cannot get the exemption unless he furnishes the declaration in the prescribed form." It was further held as under : "There is an understandable reason for the stringency of the provisions. The object of Section 5(2)(a)(ii) of the Act and the rules made thereunder is self-evident. While they are obviously intended to give exemption to a dealer in respect of sales to registered dealers of specified classes of goods, it seeks also to prevent fraud and collusion in an attempt to evade tax. In the nature of things, in view of innumerable transactions that may be entered into between dealers, it will well-nigh be impossible for the taxing authorities to ascertain in each case whether a dealer has sold the specified goods to another for the purposes mentioned in the section. Therefore, presumably to achieve the two-fold object, namely, prevention of fraud and facilitating administrative efficiency, the exemption given is made subject to a condition that the pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut services specifically in the declaration, the same can be condoned by sanctioning authority, if on the basis of inquiry and on the basis of the invoices submitted he is satisfied that the same had been received. But, if the declaration as prescribed under para 3.1 have not been filed at all or the declaration has been filed after completion of export, as a result of which the sanctioning authority had no opportunity to verify the declaration and satisfy himself that there is no likelihood of evasion of duty, the assessee cannot ask the sanctioning authority to verify the receipt of inputs and input services from records and sanction the rebate claim. The condition prescribed in para 3.1 is for the purpose of preventing the evasion of duty by misuse of this facility and, therefore, if this condition, though a procedural condition, is violated, the rebate would not be admissible. 9. In this case, according to the department, the appellant have not filed any declaration whatsoever as required under para 3.1. According to the appellant, however, since prior to the export of the services, it was not possible to file detailed declaration regarding input and input services required to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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