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2023-TIOL-1502-HC-AHM-ST
BT India Pvt Ltd Vs UoI
ST - Rule 5 of CCR - Applications for refund of unutilized CENVAT credit have come to be negatived - These claims were made on the ground of the input services having been utilized by the petitioner in connection with 'export of services', services in question being Broadcasting, Business Support, IT Software and Management, Maintenance or Repair services - Second respondent has come to conclude that the services rendered by the petitioner would not fall within the ambit of the expression 'export of services' as contemplated under Rule 6A of the Service Tax Rules, 1994.
Held: It becomes apparent that the deficiency memos abjectly fail to meet the two foundational precepts as enunciated by the Supreme Court in Gorkha Security Services - Respondents neither called upon the petitioner to explain why the services rendered by it would not be liable to qualify as an 'export of services' nor did it place the petitioner on notice of the second respondent proposing to take the view that the petitioner was an 'intermediary' - More fundamentally, the deficiency memos did not embody a preliminary view or opinion that may have been formed by the second respondent for rejecting the applications for refund - Deficiency memos did not fulfil the rudimentary requirements of an action being imbued and informed by the principles of natural justice - In any event, the deficiency memo cannot be viewed as a substitute for a SCN - Undisputedly, the petitioner had submitted self-assessment returns proceeding on the basis that the output services rendered by it would qualify as an 'export of service' and thus it being not exigible to service tax - The aforesaid self-assessment returns remained untouched and had not been questioned by the respondents either in terms of Sections 72 or 73 of the Act - The application for refund of CENVAT credit was founded on the petitioner assessing that it was not liable to pay service tax on services so exported - unless the self-assessed return, as submitted had been questioned, re-opened or re-assessed and the assertion of the petitioner of the services rendered by it qualifying as an 'export of service' questioned or negatived in accordance with the procedure prescribed under the Act, its claim for refund could not have been negated - Supreme Court in ITC Limited observed that a self-assessed return also amounts to an 'assessment' and unless it is varied or modified in accordance with the procedure prescribed under the relevant statute, the same cannot possibly be questioned in refund proceedings - In the absence of the self-assessed return having been questioned, reviewed or re-assessed, the claim for refund of CENVAT credit could not have been denied by the respondents - Once the self-assessed return of the petitioner and in terms of which its claim of refund and of being in-exigible to service tax had attained finality and had not been re- assessed or questioned, the refund was clearly liable to be granted automatically - At the stage of consideration of the application for refund, it would be impermissible for the second respondent to question whether the services rendered by the petitioner amounted to an 'export of service' or even dwell upon issues which related to its principal claim of not being liable to pay service tax - A violation of the principles of natural justice constitutes an exception to the self-imposed restraint which Bench exercises when called upon to invoke its constitutional powers conferred by Article 226 of the Constitution - Impugned order dated 04 October 2021 is quashed and set aside and Writ petition is allowed: High Court [para 46, 47, 65, 66, 67, 68, 69, 74, 75]
- Petition allowed: GUJARAT HIGH COURT
2023-TIOL-1501-HC-AHM-CUS
Gokul Agro Resources Ltd Vs Pr.CC
Cus - It is the case of the petitioner that it had exported goods under the Merchandise Exports from India Scheme (MEIS) - While claiming rewards, through oversight, the petitioner had mentioned "No" - An application was moved before the competent authority for amendment of the shipping bill u/s 149 of the Customs Act, 1962, which was rejected - Appeal against this order also met the same fate - However, the CESTAT by its order dated 02.03.2020, allowed the appeal and held that the petitioner was entitled for amendment in the shipping bill - Counsel for Respondent submits that amendment could not have been made on the portal due to various reasons. Held : An advisory has been issued in September 2023 by the Director General of Systems and Data Management, CBIC mentioning - Present system design does not allow post EGM amendment. Now an option is added "Post EGM MEIS / Reward amendment" under AC Role in ICES. Using this option, system will allow officer to amend MEIS / reward scheme flag from N to Y. Also, it will enable the SB to be transmitted to DGFT - In light of this advisory, if the petitioner makes an application to the competent authority for seeking the amendment of Shipping Bills, the portals shall accept such amendment and grant the rewards - Petitions allowed: High Court [para 5, 6]
- Petitions allowed: GUJARAT HIGH COURT
2023-TIOL-997-CESTAT-DEL
Preet Machines Ltd Vs CCE, C & ST
CX - The issue arises is, whether based on evidence available on record, it can be said that appellant had not supplied capital goods to M/s Crest Steel & Power Pvt. Limited in 2012 and only supplied invoices - Consequently, can penalty be imposed under Rule 26 of Central Excise Rules upon appellant - It is undisputed that no investigation whatsoever was conducted at the end of appellant - Appellant was not even asked if it had supplied the goods or not - If documents indicated that goods have been sent and ledgers of M/s Crest Steel & Power Pvt. Limited indicated that it has engaged the transporter, the mere fact that at the time of verification, goods could not be found, by itself, does not prove that appellant did not supply the goods - Goods were not found during panchnama but goods could have been removed by M/s Crest Steel & Power Pvt. Limited, after they were purchased - Investigation was conducted five years after the goods were supplied - Once the goods were supplied by appellant, they are beyond its control - Inconsistency in invoices ledger of transporter also does not carry the case of Revenue any further because transportation was responsibility of buyer and not of appellant - As far as appellant is concerned, once the goods have been sold at factory, it ends its responsibility - Revenue does not dispute that invoices were issued and money was received by cheque through bank by appellant - There is no evidence that appellant returned any cash to M/s Crest Steel & Power Pvt. Limited in any form and by any means - If appellant has not supplied the goods, it should not have received any payment - If there was any fraud and appellant was only issued invoices and received payment by cheque, naturally M/s Crest Steel & Power Pvt. Limited would want the money to be returned - Neither is there any evidence nor is there any allegation to this effect - Based on evidence available on record, the imposition of penalty under Rule 26 of Central Excise Rules, 2002 upon appellant cannot be sustained: CESTAT
- Appeal allowed: DELHI CESTAT
2023-TIOL-996-CESTAT-MAD
Vodafone Idea Ltd Vs CGST & CE
ST - The Appellants as part of the telecommunication services provided by them, have tied up with several foreign mobile telecom operators so that the customers of the appellant when on foreign tour, continue to receive telecom related services - This service is known in the telecommunication parlance as 'International outbound roaming' - The foreign mobile telecom operators charge the appellant for the said connectivity provided by the visited mobile operator network to the appellant's subscribers - The Appellant in turn charges their customers for the said services - Therefore, it appeared to the Department that the Appellant had received services from their foreign telecom operators for international outbound roaming services which appeared taxable under 'Business Auxiliary Service' (BAS) - A Show Cause Notice was issued to the appellant proposing to demand service tax of Rs.1,19,31,129/- for the period 01/10/2007 to 30/06/2012 along with interest and for imposition of penalty - After due process of law, the adjudicating authority confirmed the allegations in the Show Cause Notice and demanded service tax amount of Rs.1,19,31,129/- along with interest and imposed equal penalty under section 78 of the Finance Act, 1994 and penalty under Section 77 - Hence the present appeal. Held - The primary issues involved in the present appeal are - a) who is the recipient of service provided by a FTO to a cellular/mobile subscriber of an HNO, during international roaming? As per the appellant they (HNO) receives the service from the FTO and not the appellants subscriber during periods of his international outbound roaming. Revenue on the other hand is of the view that the FTO is only an intermediary and service is rendered by the HNO to their subscriber who is on international outbound roaming; b) Whether the activity of providing cellular/mobile services to a subscriber during 'international outbound roaming' relates to the taxable service of BAS defined as per section 65(19)(vi) of FA 1994 as claimed by Revenue or to TCS as per section 65(109a) of Finance Act, 1994 as averred by the appellant; and Whether the activity is taxable at the hands of the appellant - The issue of the service provider and the service recipient, has been examined by a Coordinate Bench of this Tribunal in M/s Vodafone Idea Limited Vs Commissioner of Central Excise and Service Tax, Coimbatore - Though the issue in the order pertained to 'inbound roaming services' the technical issues involved are similar - The issue as to who is the actual service provider and the actual service receiver was examined in para 11 of the Third Member's Order which forms a part of the Majority Decision - The majority order makes it clear that in the case of international inbound roaming the FTO is the person who is legally entitled to receive the service of the HNO as per the agreement, even though the beneficiary is the customer/ subscriber of FTO in the taxable territory - The order hence rejects the concept that during international roaming the subscriber of the home telecom operator is the service receiver - On the same analogy it is held that during international outbound roaming outside the taxable territory the HNO is the service recipient of the services provided by the FTO and not the HNO's subscribers/ customers - The averment of the appellant in this regard hence succeeds - The reliance placed by Revenue on the minority order and Board's 'Education Guide' has been examined by the majority decision in the same judgment and has not found favour for reasons stated therein: CESTAT Held - We can now examine the classification of the service being provided. We find that the issue has been examined by a Coordinate Bench of this Tribunal at Chennai in Vodafone Cellular Ltd dated 29/04/2019 relying on an earlier order of the Tribunal in M/s Vodafone Essar Digilink Ltd dated 30/11/2016 - The appellant has also relied upon two more judgments of Coordinate Benches in the case of Vodafone Essar Mobile VS CST, Delhi. (Final Order No 55606/2017 dated 26/07/2017 = 2017-TIOL-3315-CESTAT-DEL and Vodafone Cellular Ltd Vs CCE Pune III (Final Order No. A/91120/17 dated 30/11/2017) . Judicial discipline requires us to follow the judgments of the Coordinate Bench's - The Bench concurs with the views as examined and crystalized in the above orders. The activity of providing cellular/mobile services to a subscriber during 'international outbound roaming' relates to the taxable service of TCS as defined by section 65(109a): CESTAT Held - Therefore, the order in question is set aside - It is held that during international outbound roaming the HNO (appellant) is the service recipient of the services provided by the FTO and not the HNO's subscribers/ customers - The activity of providing cellular/mobile connectivity from outside the country to a subscriber of a HNO during 'international outbound roaming', relates to 'telecommunication service' - Although the activity of providing cellular/mobile services to a subscriber during 'international outbound roaming' relates to telecommunication service, however the said services provided by any person who is not a 'telegraph authority', as in the present case, the activity would not be a taxable service as defined by section 65(109a) of FA 1994 and is hence not exigible to service tax at the hands of the appellant under RCM: CESTAT
- Appeal allowed: CHENNAI CESTAT |
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