|
2023-TIOL-1646-HC-MAD-GST
Naga Ltd Vs Puducherry AAR
GST - An application seeking advance ruling filed by the petitioner was rejected by the Tamil Nadu Authority for Advance Ruling on the ground of lack of jurisdiction as only a supplier on whom incidence of tax lies can seek an Advance Ruling as per Section 95(a) of the CGST Act and the petitioner being a recipient of the above services cannot maintain the application under Section 97 of CGST Act - Thereafter, the 2nd respondent i.e., supplier in the contract with the petitioner filed an application for Advance Ruling dated 02.01.2019 and the AAR held that the services for clearing the imported wheat from seaports are not entitled to exemption on the ground that the imported wheat with regard to which the services were rendered was not meant for the primary market but instead meant / intended to be used by the petitioner at its factory for further processing of the wheat imported into atta, maida and sooji - Aggrieved, the present petition. Held: A reading of S. No. 54(e) of Notification No.12 of 2017-CTR and the definition of "agricultural produce", would show that the service of loading, unloading, packing, storage or warehousing of "agricultural produce" would fall within the scope of S. No. 54(e) and thus exempt - Court is of the opinion that the 1st Respondent had misdirected itself in examining the use to which the commodity / agricultural produce viz., wheat imported would be put to in the hands of the petitioner to determine the entitlement of the services to exemption or otherwise - The petitioner's entitlement to exemption must be determined by testing whether the services of loading, unloading, packing, storage or warehousing is rendered to agricultural produce or other than "agricultural produce" and not on the basis of the process the agricultural produce is meant to be subject to in the hands of the petitioner/ importer - The reasoning in the impugned order of the 1st Respondent results in importing a condition as to the use to which the agricultural produce would be subject to in the hands of the service recipient - The above test is wholly alien to decide whether a commodity would fall within the definition of "agricultural produce" contained in the above Notification - The impugned Ruling thus suffers from the vice of arbitrariness inasmuch as it has taken into account aspects/ factors which are irrelevant - Impugned order is flawed inasmuch as it results in adding conditions to exemption notification which is impermissible - Court is of the view that the impugned order holding that services of loading, unloading, packing etc., rendered in relation to the wheat imported is not entitled to exemption in terms of S.No.54(e) of Notification No.12 of 2017 on the premise that the imported wheat is not meant for primary market as such but it is intended to be converted into maida , atta, sooji etc., in the hands of the recipient i.e., the petitioner herein is unsustainable - Impugned order is set aside - Petition is disposed of: High Court [para 9.1, 9.2, 10]
- Petition disposed of: MADRAS HIGH COURT
2023-TIOL-1644-HC-MUM-CUS
Hetal Vijay Avasti Vs UoI
Cus - Petitioners submit that the Designated Officer, who adjudicated on the show cause notice issued by the Directorate of Revenue Intelligence had no jurisdiction to pass such orders on the show cause notice, in view of the settled position in law as laid down by the Supreme Court in its decision in Canon India Pvt. Ltd. - 2021-TIOL-123-SC-CUS-LB - It is submitted that considering the settled position in law that there was no jurisdiction with the DRI to issue the show cause notices in question, no useful purpose would be served to adjudicate the show cause notice and / or to pass an order on such show cause notice, as the same would be rendered illegal; that it is for such reasons and considering that the review proceedings arising out of the decision in Supreme Court in Canon India Private Limited (supra) are pending before Supreme Court, similar orders as passed in the petitions [Elite Aromas - 2023-TIOL-956-HC-MUM-CUS ], need to be passed. Held : Bench is in agreement with the petitioners - Bench observes that Court had considered similar contentions as urged on behalf of the petitioners and by referring to the proceedings which are pending before the Supreme Court, while admitting the petitions the Court had granted interim protection to the petitioners, with liberty to respondents to seek vacating of such protection - Petition is admitted - Insofar as interim reliefs are concerned, pending the hearing and final disposal of the petition, further adjudication of the show cause notice shall also remain stayed: High Court [para 4, 8]
- Interim order passed: BOMBAY HIGH COURT
2023-TIOL-1060-CESTAT-MUM
Alfa Laval India Ltd Vs CCE
CX - The root of controversy lies in contribution of 'trading' to topline of appellant for disputed period which, not being either 'manufacture' or 'service', disentitled them to offset of credit of tax paid on 'input service' used in common to the extent attributable to ineligible activity towards duties and taxes leviable on 'excisable goods' manufactured by them or 'taxable services' rendered by them - While taking of credit, in terms of rule 3 of CCR, 2004, was in order and indeed not disputed, a bar on retention of such credit in pool available for offset of duty liability has been incorporated as rule 6 of CENVAT Credit Rules, 2004 - Acknowledging the botheration in disaggregating 'input services' subsequent to procurement for erasure of credit that, in course of time and to the extent not attributable to eligible activity, was not permitted for retention, machinery provision was incorporated as sub-rule (3) therein - The appellant is a manufacturer of 'equipment for heating, cooling and separation' and, having procured certain 'taxable services' during 2011-12, proceeded to take credit of tax in said invoices as permissible under rule 3 of CCR, 2004 - The scheme of neutralisation is to be exercised only by appellant - Furthermore, it is also abundantly clear that rule 6 of Rules, 2004 merely sets out the scheme of neutralisation and entirely for assessee to comply with; any failure thereto was to be set right under the authority of rule 14 - Thus, it is clear that exercise of option vests entirely with assessee at any stage and proceedings under rule 14 would have to be restricted to that which is least detrimental to assessee - Appellant, even if belatedly, has discharged obligation claiming that to be that contemplated in rule 6 of Rules, 2004 - The demand based on harshest of options as ordered by original authority does not sustain - However, in having taken that extreme step, claim of appellant that obligation contemplated in scheme has been duly complied with was not ascertained - The discharge of obligation must be in consonance with computation envisaged in rule 6 of CENVAT Credit Rules, 2004 - To enable such ascertainment, impugned order is set aside and matter is remanded back to original authority who shall limit proceedings under rule 14 and rule 15 of CENVAT Credit Rules, 2004, if any, only to deficit, if any, in compliance: CESTAT
- Matter remanded: MUMBAI CESTAT
2023-TIOL-1059-CESTAT-MAD
LG Electronics India Pvt Ltd Vs CC
Cus - The Assessee filed refund claim under Notification No.102/2007-Cus. dt. 14.09.2007 for refund of SAD paid by them at the time of import of goods - The claim was rejected by the original authority for the reason that the invoice did not contain the endorsement "no credit of additional duty of customs levied under sub-section (5) of section 3 of the Customs Tariff Act, 1975 shall be admissible" - On appeal, the Commissioner (Appeals) upheld the same - Hence the present appeal. Held - The issue at hand is whether the the Assessee is eligible for the refund even though there is no endorsement in the invoices as per para 2(b) of the Notification No.102/2007-Cus. dt. 14.09.2007 - The issue is settled by the decision of the Tribunal's Larger Bench in the case of Chowgule & Company Pvt. Ltd. Vs CC & CCE wherein it was held that "...A trader-importer, who paid SAD on the imported good and who discharged VAT/ST liability on subsequent sale, and who issued commercial invoices without indicating any details of the duty paid, would be entitled to the benefit of exemption under Notification 102/2007-Cus., notwithstanding the fact that he made no endorsement that "credit of duty is not admissible" on the commercial invoices, subject to the satisfaction of the other conditions stipulated therein..." - In light of this order, the rejection of refund claim is not justified - Hence the order in question is set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT
2023-TIOL-1058-CESTAT-MAD
Ad2pro Global Creative Solutions Pvt Ltd Vs CST
ST - The Appellant, who were registered under Service Tax, are providing services under the category of 'advertising agency service' and 'business auxiliary service' - The Appellants have been exporting the said services to various clients located outside India and so, have been claiming refund of unutilized input service tax credit under Rule 5 of the CENVAT Credit Rules, 2004 - The Appellants have filed refund claim for the quarter April 2012 to June 2012 on 27.03.2013 for sanction of refund of Rs.40,28,643/- and similarly, another refund claim for the quarter July 2012 to September 2012 on 27.06.2013 for sanction of refund of Rs.31,40,284/- - These refund claims were partially sanctioned as, while calculating the export turnover, the export invoices realized during the quarter which are dated more than one year, were treated as time-barred in terms of Section 11B of the Central Excise Act, 1944 and the amount realized in respect of these invoices was not reckoned in computation of the export turnover - The partial rejection of refund claims came to be upheld by the Commissioner of Service Tax (Appeals-I), Chennai vide Order-in-Appeal - Similarly, the Appellant had filed six refund claims, which were processed and sanctioned by the refund sanctioning authority - The Revenue, however, filed appeals before the Commissioner of Service Tax (Appeals-II), Chennai against the sanction of the above refund claims involving the same issue of time-bar under Section 11B of the Central Excise Act, 1944 - Whether to be considered from the date of export invoice or from the date of Foreign Inward Remittance Certificates (FIRCs) - In all these six claims, the refund sanctioning authority has considered the decision of the Commissioner (Appeals) in Order-in-Appeal Nos. 184-190/ 2016 (STA-I) dated 23.03. 2016 and also the provisions of the amending Notification No. 14/2016 -C.E.(N.T.) dated 01.03. 2016 to Notification No. 27/2012-C.E.(N.T.) dated 18.06.2012 - However, the Department filed appeals against these sanction of refunds on the plea that the amendment made vide Notification No. 14/2016 -C.E.(N.T.) will be prospective and would not have retrospective effect and as certain invoices were time-barred considering the dates of the export invoices, these were required to be excluded in computation of the export turnover - Hence the present appeals. Held - The only issue that is required to be resolved in all these appeals is: whether the 'relevant date' under Section 11B of the Central Excise Act, 1944 with respect to refund claims for unutilized CENVAT Credit in case of export of services under Rule 5 of the CENVAT Credit Rules, 2004 read with Notification No. 27/2012-C.E.(N.T.) dated 18.06.2012 is the date of the export invoice or the date of receipt of consideration in convertible foreign currency i.e., the date of FIRCs, and consequently, whether the value of export for which invoices have been raised prior to the period of one year but in respect of which consideration has been realized during the relevant quarter within the period of one year, can be added to the export turnover for computation of the eligible refund under Rule 5 of the CENVAT Credit Rules, 2004 - On study of various decisions of the judicial authorities including the co-ordinate Benches of the Tribunal, we find that Section 11B of the Central Excise Act, 1944 has been drafted to prescribe a procedure for claiming of refund of Central Excise Duty under various circumstances within one year from the relevant date - The 'relevant date' has been defined in the explanation to this Section for various purposes - As far as the export of services is concerned, no relevant date was prescribed in this Section because this was meant for refund of duty of excise and not for export of services - Since the Notification No. 27/2012-C.E.(N.T.) dated 18.06.2012 required the claim to be made before the expiry of a period specified under Section 11B and this Section does not specify what is the relevant date in case of export of services, the Tribunal has, in a series of decisions, held that relevant date in case of export of services is the date of realization of the foreign exchange - The reason for this is the export of services is not complete unless the foreign exchange is realized as per Rule 3(2)(b) of Export of Services Rules, 2005: CESTAT Held - Therefore, unless the foreign exchange is realized, the export is not complete and therefore the relevant date must be the date of realization of foreign exchange - In the present case, the exports were made and refund claims were filed before the issuance of the above notification - The lower adjudicating authority, reckoning the date of export invoice as the relevant date, rejected these refund claims as time barred - There is no ground that Section 11B mandates that the date of invoice must be considered as the relevant date - The residual category under Section 11B is the date of payment of duty - In case of export of services, as in these appeals, there is no payment of duty - As such, in various cases, the Tribunal has considered as to what constitutes an export of service under the Export of Service Rules and concluded that the date of realization of foreign exchange is the relevant date - If the export is not complete, the exporter of services is not entitled to claim refund under Rule 5 of the CENVAT Credit Rules, 2004 - Therefore, harmoniously reading the Export of Service Rules and Section 11B of Central Excise Act, 1944, the Tribunal has taken a view that in case of export of services, the relevant date must be the date of realization of foreign exchange - For this reason only, an amending Notification No. 14/ 2016 -C.E.(N.T.) dated 01.03. 2016 was issued to remove the lacuna in the initial Notification No .27/2012-C.E.(N.T.) dated 18.06.2012: CESTAT Held - In respect of the refund claims filed for Rs.40,28,643/- on 27.03.2013 and for Rs.31,40,284/- 27.06.2013, the Appellant has requested for refund of interest where the refund claims filed under Rule 5 of the CENVAT Credit Rules, 2004 were rejected by the original refund sanctioning authority, in terms of the provisions of Section 11BB of the Central Excise Act, 1944 - The procedure prescribes debiting the CENVAT Credit account before filing the refund claim and it also provides for taking back of the credit into their CENVAT Credit account of the amount not considered for sanction or where the refund claims are partially sanctioned - So, in view of this, the provisions are very clear as to debiting or crediting of the CENVAT Credit maintained by an assessee prior to applying for refund or its sanction or otherwise - It has to be noted that accumulated CENVAT Credit lying unutilized does not carry any interest - The procedure prescribed for filing refund claims for unutilized CENVAT Credit in case of export of services under Rule 5 of the CENVAT Credit Rules, 2004 clearly lays down that the assessee is free to take back the credit of not sanctioned/partially sanctioned refunds - As such, payment of interest in the circumstances of these appeals is not provided for - Hence the Orders-in-Appeal in question, are set aside: CESTAT
- Appeals allowed: CHENNAI CESTAT |
|
