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TMI Blog2023 (9) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... re this tribunal is devoid of any merits. It is settled law that if certain provisions of law or any notification issued under the statute is held ultra vires by any High Court in the country the same is valid law in the jurisdiction of all the High Courts of the country, unless and until jurisdictional High Court or some other High Court gives a contrary view. On specific query as to whether there is any contrary order of any High Court or jurisdictional High Court in the matter which may support the case of the Revenue learned Authorized Representative was not able to point out the same. It is settled law that law as declared by the Hon ble Gujarat High Court is law of land as on date today. The order of Commissioner (Appeal) which follows the said decision cannot be faulted with - Appeal dismissed. - HON BLE MR. SANJIV SRIVASTAVA , MEMBER ( TECHNICAL ) Shri Santosh Kumar , Authorised Representative for the Respondent Absent on Call , for the Appellant ORDER SANJIV SRIVASTAVA : This appeal filed by the revenue is directed against the order in appeal No.MRT/EXCUS/000/APPL-MRT/04/2020-21 dated 06.05.2020 of Commissioner (Appeal) Central Goods an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, which as discussed above remained a deposit with the department without the authority of law, along with the interest from the date of deposit. The adjudicating authority was in serious error in denying the refund to the appellant on unsustainable grounds as mentioned above. 6. In view of above discussion and findings the impugned order No 01/DC/ST/MBD/19-R dated 14.06.2019 is set aside, and appeal bearing No 165-ST/APPL-MRT/MRT/2019 dated 19.08.2019 filed by M/s Neeru Enterprises (EOU-Unit-II), Salim Manzil, Civil Lines Rampur, UP is allowed with consequential relief. 2.0 Revenue has filed this appeal stating as follows in the ground of appeals:- 2. In this case, substantive question of law is involved, as the appellate authority has allowed appeal filed by the respondent in the light of judgment dated 06.09.2019 of Hon'ble High Court of Gujarat (in Civil Appeal No.20785 of 2018) filed by M/S SAL Steel Limited and Others Versus Union of India. Hon'ble High Court of Gujarat has struck down Notification No.15/2017-ST and Notification No.16/2017-ST making Rule 2(1)(d)(EEC) and Rule 6(7CA) of the Service Tax Rules and inserting Explanation- V to reverse char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Provision of Services Rules, 2012 is in taxable territory even in cases where the service is partially performed in India. Further, in case of All India Federation of Tax Practitioners v. Union of India [2007] 9 VST 126 (SC); [2007] 7 SCC 527, the Supreme Court has declared that service tax is a destination based consumption tax and thus the relevance of the place where the services are rendered or consumed assumes critical importance for sustaining the levy of service tax. In this case of transportation of goods by a vessel from a place outside India upto Indian Port i.e. land mass of the country, the service is finally consumed at Indian Port. Further, as an extension for collection of service tax on the services mandated in Section 66B, sub section (1) of Section 66C of the Finance Act, 1994 gives power to Central Government to frame Rules to determine the Place of Provision of Services. As per the power conferred under Section 66C(1) Place of Provision of Services Rules, 2012 has been framed and Rule 10 of Place of Provision Rules, 2012 states that The place of provision of services of transportation of goods, other than by way of mail or courier, shall be the place of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith respect to extra-territorial aspects or causes that have an impact on or nexus with India. In this case, the import of goods is destined to India and therefore the service by way of transportation of goods by a vessel is also finally consumed in India. Also, as per Rule 10 of Place of Provision Rules, 2012 The place of provision of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of the goods read with Section 66C(1) of the Finance Act, 1994, the place of provision of this service is India i.e. taxable territory and therefore, there is a clear nexus of the extra- territorial aspect of the service with the territory of India. It is further submitted that Serial No.34 (c) of Notification No.25/2012-ST dated 20.06.2012 exempts services received from the provider of service located in a non-taxable territory by a person located in a non- taxable territory. This resulted in an anomaly between Indian and, foreign service providers providing transportation of goods into India by vessels (Shipping Lines) leading to Indian service providers (who, being in taxable territory were paying service tax) losing business t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Indian Association of Tour Operators has filed a Special Leave Petition (Civil) Diary No.14690 of 2018 against the Judgment in the Hon'ble Supreme Court. Therefore, this case is still pending before the Hon'ble Supreme Court and yet to attain the finality. The Hon'ble High Court of Gujarat in this judgment held that the Indian importer can't be brought into the ambit of charging section i.e. Section 66B of Finance Act, 1994 and therefore the levy of Service Tax for services provided or agreed to be provided by a person located in non- taxable territory to a person located in non- taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India can't be levied. In this regard, charging Section of Finance Act, 1994 is Section 66B which reads as under There shall be levied a tax (hereinafter referred to as the service tax) at the rate of fourteen percent on the value of all services; other than those services specified in the negative list, provided or agreed to be provided in the taxable territory by one person to another and collected in such manner as may be presc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gujarat has erred in holding that the impugned provisions creating a charge of service tax on third parties, though the Act of the Parliament provides for levy and collection of tax either from, the person providing service or, from the person receiving service, are beyond the charging provision and also beyond the Rule making power of Section 94 of the Finance Act, 1994. Hon'ble Supreme Court, in the case of Gujarat Ambuja Cements Vs. UOI 2005 (182) E.L.T. 33 (SC) held that - the point at which the collection of the tax is to be made is a question of legislative convenience and part of the' machinery for realization and recovery of the tax. Subject to the legislative competence of the Taxing Authority a duty can be imposed finds to be convenient and the most effective, whatever stages it at the stage which the authority may be. The Central Government is therefore legally competent to evolve suitable machinery for collection of the service tax subject to the maintenance of a rational connection between the tax and the person on whom it is imposed. It is outside the judicial ken to determine whether the Parliament should have specified a common mode for recovery of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h service. In this regard, it is submitted that actual value of service provided being not known does not mean that value of service does not exist and such value is very much available in the contract between seller/supplier and the shipping line. It is always possible for the petitioner to obtain the information about this value and pay the service tax as prescribed. It is only as an option that if the petitioner does not want to obtain such information, then the alternate method of valuation has been prescribed as per Rule 6(7CA) of Service Tax, Rules, 1994 which has to be read with Section 67(1)(iii) of the Finance Act, 1994. In the case of Gujarat Ambuja Cements vs. UOI 2005 (182) E.L.T. 33 (SC) Supreme Court has stated that Legislative competence is to be determined with reference to the object of the levy and not with reference to its incidence or machinery and that there is a distinction between the object of tax, the incidence of tax and the machinery for the collection of the tax. Therefore, the Hon'ble High Court of Gujarat has clearly erred in the subject judgement that no machinery provision for impugned service exist and therefore Rule 6(7CA) of the Servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... J14 (S.C.)]. The Supreme Court Bench comprising Hon ble Mr. Justice A.M. Khanwilkar, Hon ble Mr. Justice B.R. Gavai and Hon ble Mr. Justice Krishna Murai on 18-1-2021 after condoning the delay issued notice in Special Leave Petition (Civil) Diary No(s). 27016 of 2020 filed by Union of India (Respondent being Asahi Songwon Colors Ltd.) against the Judgment and Order dated 6-9-2019 of Gujarat High Court in R/Special Civil Application No. 3123 of 2019 as reported in 2020 (37) G.S.T.L. 3 (Guj.) (SAL Steel Ltd. v. Union of India). While issuing notice, the Supreme Court passed the following order : Issue notice on the application for condonation of delay as well as on the Special Leave Petition. Tag with Diary No. 27027/2020. The Gujarat High Court in its impugned order had struck down Notification Nos. 15/2017-S.T. and 16/2017-S.T. inserting Explanation V to reverse charge Notification No. 30/2012-S.T. and making Rules 2(1)(d)(EEC) 6(7CA) of Service Tax Rules, 1994 and declared same as ultra vires the provisions of Sections 64, 66B, 67 and 94 of the Finance Act, 1994. By way of aforesaid amendments, the importer in CIF contracts who was neither service provi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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