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2021-TIOL-869-HC-MAD-CX
SRF Ltd Vs CEGAT
CX - On 21.07.1990, petitioners filed a refund claim for the additional duty of excise paid by them on rubberised textile fabrics during the period from 31.05.1990 to 06.07.1990 - Subsequently, the petitioner had raised credit notes to its customers who had received the goods, for the amount of additional duty of excise collected from them during the period for which refund was claimed by the petitioner - The original authority, namely, the second respondent issued a show cause notice to the petitioner calling upon them to state as to why the refund claimed by them should not be credited to the Consumer Welfare Fund in terms of Section 11B(2) r/w. Section 12C of the CEA, 1044 - The second respondent proposed that since the incidence of duty had been passed on to the buyers by the petitioner on the date of clearance of goods, the petitioner ceases to be entitled for refund - The petitioner by contending that though apparently the incidence of additional duty of excise had been passed on to the consumers by issue of invoices, at a later date, the same was reversed by issue of credit notes and requested to sanction the refund claimed - The adjudicating authority held that since the incidence of duty had been passed on by the assessee to the buyers on the relevant date, they cease to be entitled to the claim of refund and the issue of credit notes subsequently does not alter the position as there is no provision in the amended section for such an undertaking - Further the authority held that since the assessee has collected the sum representing it as excise duty from the buyers at a time when no excise duty was leviable as additional duty of excise, the issue would fall under the purview of Section 11D of the Act according to which every person who has collected any amount from the buyers on any goods in any manner as representing duty of excise, shall forthwith pay the amount so collected to the credit of the Central Government - With the above finding, the claim for refund was rejected - Both the appellate authorities rejected the appeal filed by the assessee by citing the decisions in CCE vs. Addison Company = 2002-TIOL-58-CESTAT-MAD , wherein it was held that refund is not admissible if credit notes have been issued not at the time of clearance of the goods but subsequently; larger bench of the Tribunal in the case of S.Kumar's Ltd vs = 2003-TIOL-01-CESTAT-DEL-LB , wherein it was held that the provisions of unjust enrichment are attracted even where the collected amount of excise duty had been paid back to the buyer subsequently - Therefore, the present writ petition.
Held:
++ The decision in Addison and Co. Ltd., particularly the ratio laid down in paragraphs 19 to 21 of the judgment is a clear answer to the assessee's case.
++ Admittedly the assessee at the time of issuance of invoices/gate passes have collected the additional duty of excise from its customers/buyers. Much after that, they filed a refund claim and produced the copies of credit notes stating that the duty collected from the buyers had been refunded to the assessee and hence they are entitled for claiming refund under Section 11B of the Act. Thus, it is not disputed by the assessee that the amount of duty of excise had been passed on to its customers.
++ The verification to be done by the Department, to enquire about the ultimate buyer who has actually paid the duty is not a futile exercise as refund can be granted only to a person who has paid the duty and not to anyone else and if the ultimate consumer cannot be identified, the amount would be retained in the fund. This is more so because the word "buyer" in clause (e) to proviso to Section 11B(2) of the Act cannot be restricted to the first buyer from the manufacturer.
++ The basis for the claim of refund was on account of the fact that on or after 31.05.1990 the rate of duty was NIL. For the period between 31.05.1990 and 06.07.1990 the assessee paid additional duty of excise and had passed on the incidence of duty to its customers at the time of issue invoices/gate passes. Therefore, the subsequent issuance of credit note is of little avail as the incidence for the excise duty is deemed to have been passed on by the assessee to its buyer and therefore not entitled for filing an application for refund under Section 11B of the Act merely because they subsequently came to know that the rate of duty was NIL and credit notes are said to have been issued to the buyer.
++ Thus, the Tribunal was right in affirming the order passed by the First Appellate Authority who confirmed the order passed by the adjudicating authority. [para 18]
- Writ petition dismissed: MADRAS HIGH COURT 2021-TIOL-867-HC-DEL-ST
Back Office IT Solutions Pvt Ltd Vs UoI
ST - Grievance and consequent relief sought by the petitioner is confined to the failure on the part of the contesting respondents to scrupulously adhere to the provisions of the instruction dated 21.12.2015 bearing F. No. 1080/09DLA/MISC/15/757 and the Master Circular dated 10.03.2017 issued by Central Board of Excise & Customs; that the impugned show cause notice cannot survive given the provision contained in paragraph 5 of the 2017 Master Circular [and the pari materia provision made in the 2015 instruction] for mandatory consultation with the assessee before issuance of a show cause notice; that since a pre-show cause notice consultation was not held, in terms of the judgment of the coordinate bench of this court, rendered in Amadeus India Pvt. Ltd. = 2019-TIOL-1027-HC-DEL-ST , the impugned show cause notice dated 23.04.2019 deserves to be quashed - Contesting respondents contend that the petitioner's case falls in the first exception, which relates to preventive action and, therefore, the 2017 Master Circular has no applicability in the instant case.
Held: A perusal of the extract taken from the 2017 Master Circular , would show that respondent no. 3 has made pre-show cause notice consultation by the Principal Commissioner/Commissioner before issuance of a show cause notice [in cases involving demands concerning duty above Rs.50,00,000/-] mandatory in line with the provisions of the 2015 instruction - There are two exceptions to the pre-show cause notice consultation, first, where the matter concerns prevention and second, where the show cause notice relates to an offence said to have committed by the assessee - By its very construct, the impugned show cause notice is not preventive; it seeks to progress the case set up by the contesting respondents that the services rendered by the petitioner-company to NAV Fund and NAV Consulting are exigible to tax - Whether or not the services rendered by the petitioner company to two separate juridical entities outside India will be exigible to tax will fall within the realm of adjudication, and certainly, would not bring the matter within the excepted category, i.e., preventive action in terms of paragraph 5 of the 2017 Master Circular - The allegation that the petitioner company did not deliberately register itself with the concerned authority for the purposes of service tax and consequently, evaded payment of service tax are matters which will get sorted out if the contesting respondents seek and are able to inter alia obtain necessary information as to the true nature of the services rendered by the petitioner-company, as to the real relationship between the petitioner-company and NAV Consulting and NAV Fund and whether the transaction is at arm's length, and as to the structure of the recipients - Merely emphasizing, in the counter-affidavit and the sur-rejoinder, that this is a case that falls in the first exception, i.e., "prevention", would not take it out of the purview of the 2017 Master Circular - stand taken by the contesting respondents cannot be accepted - Bench is of the view that the contesting respondents were mandatorily required to have a pre-show cause notice consultation with the petitioner-company and that having not being done in the instant matter, the proceedings initiated by the contesting respondents via the impugned show cause notice are non est in law - Matter is remanded to the contesting respondents with directions - Writ petition is disposed of: High Court [para 5.1, 5.2, 5.3, 6.2, 6.3, 6.5, 7, 7.1]
- Petition disposed of: DELHI HIGH COURT
2021-TIOL-864-HC-MAD-CX
Automotive Coaches And Components Ltd Vs CGST & CE
CX - When the case was listed for hearing on 08.01.2021, it was submitted that the appellant-company is under liquidation and he is unable to contact the officials and prayed for adjournment - Subsequently, the case was listed on 11.02.2021 and further adjourned to 18.03.2021 - In terms of directions issued, the appellant-company has intimated the Insolvency Resolution Professional by sending notices by speed post as well as by e-mail and a memo of compliance dated 15.03.2021, complying the order dated 11.02.2021, has been filed - The said memo is taken on record - Since none appears for the appellant-company, appeals are dismissed for default - Consequently, the substantial questions of law are left open: HC
- Appeals dismissed: MADRAS HIGH COURT
2021-TIOL-209-CESTAT-DEL
Rakesh Canteen Contractor Vs CCE, C & ST
ST - The only issue involved is that initially M/s Caparo Engineering India Limited paid the service tax to the appellant, the service provider and later on the assumption that the said service is exempt, have deducted the amount of service tax admittedly from the subsequent bills of the appellant, which has been reflected in their ledger account of appellant maintained in the books of M/s Caparo Engineering India Limited - The refund has been rejected on the presumption that the service tax burden must have been passed on to the workman/staff of M/s Caparo Engineering India Limited (users of the canteen) - The appellant have not led evidence that there was no passing of service tax burden to the end users of canteen - In view of the contention of appellant at the bar that food has rather been given at subsidised rate, appeal allowed by way of remand to the Adjudicating Authority with the direction to examine the agreement between the appellant and M/s Caparo Engineering India Limited, as well as other relevant documents like costing of food, price charged from the end users - If it is found that the company M/s Caparo Engineering India Limited have not passed on the burden of the service tax to their employees/ workers, the amount of refund shall be paid to the appellant: CESTAT
- Matter remanded: DELHI CESTAT |
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