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TMI Blog2023 (5) TMI 336X X X X Extracts X X X X X X X X Extracts X X X X ..... he same authority disposing off three appeals upon remand by the Tribunal for consideration on merit, are before us as four separate appeals. 2. Considering the manner in which the tax liability, discharged by two providers of service to each other for the same period, is sought to be returned to one of them in appeal before us, marshalling of facts would not be out of place. M/s Pfizer Ltd and M/s Wyeth Ltd had been rendering service to each other in pursuance of which tax liability under section 66B of Finance Act, 1994 on the consideration received thereupon was regularly being deposited in the Consolidated Fund of India as prescribed in Service Tax Rules, 1994. Following the acquisition of the overseas parent group of the latter by the overseas parent of the former, the amalgamation of the two entities in India was commercially inevitable and the Board of Directors of the appellant company approved resolution for such merger on 23rd November 2013. For reasons that are patent, the 'appointed date' under company law was retrospectively placed as 1st April 2013 and statutory approval of the scheme of amalgamation, sought vide petition dated 1st February 2014 from the Hon'ble High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period, the challenge before the first appellate authority was met with the same response. 5. The other two claims for refund of tax of Rs. 7,83,72,568 paid by M/s Pfizer Ltd and Rs. 30,13,679 paid by M/s Wyeth Ltd for the period from January 2014 to September 2015 were rejected, notwithstanding the filing after scheme of amalgamation had obtained approval of the statutory authority, on a ground common to the other two, viz., that the obligation under section 73A of Finance Act, 1994 precluded grant of refund besides holding that failure to challenge the assessment was fatal to entitlement for refund and that Rs. 2,34,67,461 and Rs. 7,78,073 respectively were barred by limitation of period prescribed in section 11B of Central Excise Act, 1944. 6. Ex facie, the lower authorities do not appear to have rendered finding on the liability to tax for the period covered by the scheme of amalgamation preceding the approval granted by the Hon'ble High Court though the decision of the Tribunal in Usha International Ltd v. Commissioner of Service Tax, New Delhi [2016(43)STR 552(Tri- Del)], with particular emphasis on '6. We have considered the contentions of both sides. We find that as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x not liable to be paid by operation of law or by transformation from circumstances permitting levy. Additionally, for the tax discharged after the approval of the Hon'ble High Court, bar of limitation and failure to have the self-assessment set aside, justified as necessary precedent as held by the Hon'ble Supreme Court in ITC Ltd v. Commissioner of Central Excise, Kolkata-IV [2019-TIOL-418-SC-CUS -LB], were also invoked. 8. While the inapplicability of section 73A of Finance Act, 1994 is built upon the proposition of erasure of 'any other person' receiving service by deeming of the provider and recipient to be the same through retrospective legislation or, as in the present instance, through retrospective effect of law placing it, thereby, beyond even the pale of that taxation which, by specific deeming in law reverses the flow of commercial engagement, there is an incidental argument of Learned Counsel that appellant had not been placed on notice before the provision was invoked to their detriment. We find that though the original authority had not proposed rejection of eligibility to sanction of refund on such ground in the notice and, at the same time, take note that the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority are to credit the Consumer Welfare Fund by default unless, subject to compliance with the specified circumstances, return of the amount to the claimant is justified. Rejection is contingent only upon satisfaction on the part of the statutory authority that tax liability is mandated by law and, that too, preceded by notice of intent not to sanction refund. Even the saving grace of adherence to the letter of the law, by recourse to section 73A of Finance Act, 1994 after sanction of refund, is glaringly absent. Hence, we do not find any reason to venture upon confirming the legality of recourse to that special provision in Finance Act, 1994. 12. On the contention of Learned Authorized Representative that the decision of the Hon'ble Supreme Court in ITC Ltd v. Commissioner of Central Excise, Kolkata-IV [2019 (368) ELT 216 (SC)] precluded entertaining of refund claim unless preceded by recourse to challenge of assessment, and, indeed, of self-assessment, there is no doubt that the Tribunal in JK Industries Ltd v. Commissioner of Central Excise, Indore [2006 (3) STR 14 (Tri-Del)] endorsed the legality of tax deposited upon self-assessment but the peculiar circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. Unlike Service Tax, in customs even though self-assessment is done by the assessee, but the same is verified and allowed the clearances by the Custom officer on the Bills of Entry. It is that Bills of entry which is treated as order of assessment and any aggrieved person can file appeal against such as order of Bill of Entry. In the Service Tax matter, the assessee simply filed the ST-3 return and no order was passed by the departmental officer which can be challenged by way of filing appeal before the Commissioner (Appeals).... 4.7. As per the plain reading of the above Section 85 (1), it provides for filing an appeal before the Commissioner (Appeals) only in case an order is passed by an officer below the rank of Principal Commissioner or Commissioner of Central Excise. In the case of self-assessment of Service Tax there is no order of assessment passed by any officer below the rank of Principal Commissioner or Commissioner of Central Excise. Therefore, there is no provision corresponding to Section 47(2) of Customs Act, 1962 in the Finance Act, 1994. Therefore, there is a clear distinction between the assessment under Customs and Service tax. Therefore, the ratio of ITC L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the jurisdictional High Court to the decision of the Board of Directors for setting out on the path to amalgamation is the underlying rationale for acknowledgement that the transferor has ceased to exist. 16. However, an aspect that is not on record in re Usha International Ltd, and other decisions rendered by the Tribunal, is the nature, and extent, of transactions that were in dispute before the decision to merge was formulated. Undoubtedly, a plethora of procedures precede the petitioning before the jurisdictional High Court and the elapse of time taken for grant of approval cannot impinge upon the contractually agreed date of effect of merger or amalgamation save in circumstances of express declaration by the High Court. In the present dispute, the scheme of merger incorporates an 'appointed date' that is antecedent to the placement of the scheme before the competent statutory authority under company law. Or, for that matter, even before the Board of Directors resolved to proceed with the amalgamation. Hence, the sanctity of the 'appointed date', except for matters appurtenant to relevant determination under such other relevant laws, is not universally applicable. 17. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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