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TMI Blog2024 (5) TMI 1056X X X X Extracts X X X X X X X X Extracts X X X X ..... at the equivalent amount of foreign exchange payable to the appellant was not released to the Indian Railways, and therefore, the appellant complied with the provision of Rule 3(1)(b) of the Rules.'. Similarly, in the final order in the case of the appellant in NATIONAL ENGINEERING INDUSTRIES LTD. VERSUS COMMR. OF C. EX., JAIPUR [ 2011 (9) TMI 759 - CESTAT, NEW DELHI] , the issue decided in favour of the appellant was whether the service provider appellant in India getting rupee value equivalent to commission amount of 5% US $ shall be liable to service tax on the allegation of nonfulfilment of condition of Rule 3(1)(3) of Export Service Rules, 2005. Admittedly, neither the final order nor the consequential order of refund was challenged by the Revenue and had thereby attained finality. If the Revenue was agreed by the grant of the refund amount, the proper remedy was to approach the proper forum by way of appeal and not by issuing the show cause notice as they have done in the present case. May be, the matter was subjudiced before the Supreme Court, however, there was no stay of the impugned order and, therefore, the Revenue was bound to implement the order of the Tribunal as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d refund claim of service tax paid thereon relying on several decisions of the Tribunal including those passed in their own case for the period from 2005 onwards. 5. Heard Ms. Sukriti Das and Ms. Aarushi Prabhakar, Advocates for the appellant and Shri Rohit Issar, Authorised Representative for the respondent. 6. The present case has a chequered history and the learned counsel for the appellant has placed on record the chronology of events giving rise to the present appeal, which is set out below : - Date Particulars 1ST ROUND OF LITIGATION 25.2.2009 An application for refund of Service Tax amounting to Rs. 11,11,899 paid vide Challan dated 5.5.2008 on export of services to EMD, pertaining to April 2008 was filed 22.5.2009 A Show Cause Notice (SCN) was issued proposing rejection of the refund claim on the ground that the services provided to EMD do not qualify as export of services inasmuch as Appellant had not received the commission in convertible foreign exchange. 16.12.2009 Vide Order-in-Original No. 56/ST/Ref/09 ( OIO ), the Ld. Assistant Commissioner rejected the refund claim on the ground it did not satisfy the conditions stipulated in Rule 3(2) of the Export Services Rules, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise Act read with Section 75 of the Act, on the ground that the said transaction do not qualify as export of services. It was further held in Para 13, pg. 56 of appeal memo that the Hon ble CESTAT has erred in allowing the appeal of the assessee . Further, non-filing of appeal by department against refund Order/CESTAT order and issuance of protective of SCN for recovery of erroneous refund are both separate issues and cannot be clubbed together. 28.4.2023 Vide the impugned Order-in-Appeal No. 21(RLM)CE/JPR/2023, the Ld. Commissioner (Appeals) dismissed the appeal of Appellant upholding the aforesaid OIO dated 30.7.2021, on the ground that basic condition of receipt of service in convertible foreign exchange, as per Rule 3(2) of the Export of Services Rule, 2005 is not complied. It was further held in Para 6.6, pg. 42 of appeal memo, that identical issues for earlier periods, in case of same appellant is pending decision before the Hon ble Supreme Court, therefore the appeals are rejected. Hence, the present appeal. 7. From the facts set-out above, the submission of the learned counsel for the appellant, Ms. Sukriti Das is that the issue raised in the present appeal whether the refu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant received payment in convertible foreign-exchange. Rule 4 of Export of Services Rules, 2005 provides any service, which is taxable under Clause (105) of Section 65 of the Act, may be exported without payment of Service tax. Sub-rule (2) of Rule 3 of the Rules, is as under : (2) The provision of any taxable service shall be treated as export of service when the following conditions are satisfied, namely :- (a) such service is delivered outside India and used outside India; and (b) payment of such service provided outside India is received by the service provides in convertible foreign exchange . 7. In order to avail the benefit of Rule 4, the assessee has to fulfil the conditions of Rule 3(2) of the said Rules. I agree with the submission of the ld. DR that the purpose of Rule 3(2) of the said Rules is to earn convertible foreign exchange and then benefit of exemption of Service tax would be extended to the assessee. In the present case, it is revealed from the Purchase Order that payment would be made to the appellant by convertible foreign exchange from USA company through Indian Railways, who paid in Indian Rupees as the same amount of foreign exchange was not relea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the submissions of the Revenue in view of the judicial pronouncement on the binding nature of the decision rendered by the higher forum on the principle of judicial discipline. The final order dated 22.05.2017 passed by the Tribunal had allowed the amount to be refunded to the appellant. Consequently, the Asstt. Commissioner vide order dated 17.11.2017 had sanctioned the consequential refund to the appellant based on a verification report of the jurisdictional range officer. 12. Admittedly, neither the final order nor the consequential order of refund was challenged by the Revenue and had thereby attained finality. If the Revenue was agreed by the grant of the refund amount, the proper remedy was to approach the proper forum by way of appeal and not by issuing the show cause notice as they have done in the present case. May be, the matter was subjudiced before the Supreme Court, however, there was no stay of the impugned order and, therefore, the Revenue was bound to implement the order of the Tribunal as confirmed by the High Court of Rajasthan. 13. I find support from the decisions relied upon by the learned counsel for the appellant in the case of M/s.Gap International Sourc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was not stayed, suspended or set aside by the higher courts. It was further observed that the judgement of the Supreme Court on judicial discipline is over three decades old and is well known, however, the Commissioner (Appeals) has not only followed the decision of this Tribunal but displayed scant regard to the principles of judicial discipline. 15. The subsequent decision of the Tribunal in Commissioner, CGST Central Excise-Alwar Vs. Balkrishna Industries Limited (Vice versa) 2023(3)TMI 293 (CESTAT New Delhi took note of the objection raised by the assessee on the averments made by the Revenue that the final order passed by the Tribunal did not have binding effect in so far as the instant cases involving similar issue for further period were concerned and the Adjudicating Authority had erred by following the final order passed by the Tribunal which has never been accepted by the Department. It was observed as under:- 9. We agree with the objections so raised. The revenue ought not to have made such averments. The Counsel representing the revenue ought to have been conscious in drafting the pleadings and avoid making such offensive submissions before a judicial forum. The state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the show cause notice are quoted below:- 3. On examination of Hon ble Tribunal s Final Order No. A/53395/2017-SM (BR) dated 22.05.2017 regarding its correctness, proper and legality in terms of Section 35G of the Central Excise Act, 1944 as made applicable in Service Tax matters vide Section 83 of the Finance Act, 1994, the Final Order No. A/53395/2017-SM(BR) dated 22.05.2017 passed by the hon ble CESTAT, New Delhi regarding export of services even after the assessee had not received the payment in convertible foreign currency and had thus contravened the provisions of Rule 3(2)(b) of the export of service Rules, 2005 are found to be not correct and proper to the extent of sanction of refund of Rs. 11,11,899/- as per the ground mentioned below : 3.2 Whereas, in the instant case, commission was received by the assessee in non-convertible Indian Rupees, therefore, the services provided by them cannot be treated as export of taxable service as they have not fulfilled the condition/requirement as stipulated under Rule 3(2) of Export of Services Rules, 2005. Accordingly, the assessee was required to pay due service tax under the provision of Finance Act, 1994/ Service Tax Rules, 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is beyond their jurisdiction and is a matter of concern, to be taken note of by the Department. 20. The principle has been concurrently reiterated by the Courts that once a judgement or judicial order is passed by the court of law against the department, the remedy available to the Department is by way of an appeal to a higher court for review and where no appeal or review is filed, the lis between the parties, viz. the petitioners and the department of Central Excise attains finality in respect of the issues, which are now sought to be re-opened by way of a show cause notice Topcem India Vs. Union of India 2021-TIOL-857-HC-GUW-ST . In the said case, the refunds were granted and sanctioned in terms of the judgement of the Apex Court in the case of M/s.SRD Nutriets Pvt. Ltd., however, the said decision was later held to be per incuriam and in that view, the department issued the show cause notice to recover the refunded amount. In the circumstances, the High Court observed that finality of the issue inter party has been arrived at, where no appeal or review has been filed by the department in respect of the refunds granted earlier and also from the show cause notice, it is ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revision under the Act. So long as the orders stand as having attained finality, the same cannot be tampered with by the Adjudicating Authority by launching collateral proceedings purportedly under Section 11A of the Act. 16. The judgment of the Hon'ble Supreme Court in the cases of Priya Blue Industries Pvt. Ltd. -2004 (172) ELT 145 (SC) and Flock India Pvt. Ltd., 2000 (12) ELT 285 (SC), relied upon by the CESTAT are exactly on the point and leaves no manner of doubt that Section 11A of the Act is not invocable when refund has been sanctioned by the Adjudicating Authority by passing a speaking order and which order is appealable under Section 35 of the Act, more particularly, when such order has not been challenged by the revenue and has attained finality. 23. Thus, in view of the discussion above in the light of the various judicial pronouncements, I hold that the authorities below have seriously erred in upholding the recovery of the refunded amount from the appellant. Once the issue has been decided by the Tribunal that the appellant is entitle to the refund, the authorities below have no jurisdiction to order for recovery of the said refunded amount unless the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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