ST - Since rate of duty is not under dispute for claiming refund under notifn No 41/2007, in terms of Sec 35D(3) appeal does not lie before division bench & shall be heard by single member subject to condition that amount involved is less than Rs 50 lacs: CESTAT
By TIOL News Service
MUMBAI, JAN 14, 2016: IN the case of Nakshtra vs. CCE, Pune - 2011-TIOL-1274-CESTAT-MUM assessee paid service tax on the activities undertaken by them for the period July, 2005 to December, 2006 under the category of "construction of complex services" voluntarily without any protest. Subsequently, when Works Contract service was brought under the tax net effective from 01/06/2007, the assessee submitted that since the service provided by them comes under the category of "works contract" and not under the category of "construction of commercial complexes", they are entitled for the refund of the service tax paid by them for the previous periods.
A refund claim was filed by the assessee but the same came to be rejected by the lower authorities.
In appeal, the Single Member Bench observed -
"3. From the facts of the case, it is clear that the issue involved is the rate of service tax liable to be paid by the respondent/assessee. As per the Section 35D (3) of the Central Excise Act, 1944 made applicable to service tax, when the rate of tax or the value of service rendered is one of the issues involved, then the matter has to be heard by a Division Bench. Accordingly, the registry is directed to place this matter before the Division Bench for consideration and disposal."
In the present case, after perusing the notification 41/2007-ST and the provisions of section 35D(3) of CEA, 1944, the Division Bench opined that it does not agree with the views expressed by the Single Member (Technical) (supra) by citing the following reasons:
(a) In this case, exemption Notification 41/2007-ST is involved. As per this Notification there is no exemption available to the service provider, service provider is required to pay applicable service tax and no exemption is available to the service provider.
(b) Under this Notification the service recipient, if service received by him is used in export of services or goods can claim refund subject to certain conditions laid down in the notification.
The Division Bench, therefore, held -
"Therefore primarily this notification is not deciding the rate of duty whereas it is only a mechanism for refund of service tax, already paid by the service provider, in the hands of service recipient, in cases where service recipient used the services in export of goods. As services on which the exemption notification is applied is only for taking refund claim, there is no dispute about liability to pay service tax in the hands of service provider, therefore rate of service tax nowhere is the issue in the present case.
…we are of the considered view that since rate of duty is not under dispute for claiming refund under notification No. 41/2007-ST, in terms of Section 35D(3) the appeal does not lie before the division bench and shall be heard by single member bench subject to condition that amount involved is less than Rs. 50 lacs."
Thereafter, the Bench listed the various instances when the Single Member Bench of Member (Technical) or Member (Judicial) had heard and decided similar matters.
Some of these cases are -
+ 2011-TIOL-988-CESTAT-MUM - GARWARE POLYESTER LTD. Versus COMMISSIONER OF C. EX., AURANGABAD
+ 2011-TIOL-1185-CESTAT-MUM - INDOWORTH (INDIA) LTD. Versus COMMISSIONER OF CENTRAL EXCISE, NAGPUR
+ 2012-TIOL-26-CESTAT-MUM - TEXPORT INDUSTRIES P. LTD. Versus COMMISSIONER OF SERVICE TAX, MUMBAI-IV
+ 2011-TIOL-1477-CESTAT-MUM - KING METAL WORKS Versus COMMISSIONER OF CENTRAL EXCISE, MUMBAI-IV
+ 2011-TIOL-36-CESTAT-KOL - INDIAN METALS & FERRO ALLOYS LTD. Versus C.C.E., C. & S.T., BHUBANESHWAR-I
+ 2014-TIOL-2847-CESTAT-MUM - KHOSLAPROFIL PVT. LTD. Versus COMMISSIONER OF CENTRAL EXCISE, THANE-I
+ 2011-TIOL-362-CESTAT-MUM - NOBLE GRAIN INDIA PVT. LTD. Versus COMMISSIONER OF C. EX., NAGPUR
+ 2010-TIOL-1188-CESTAT-MUM - CBAY SYSTEMS (INDIA) PVT. LTD. Versus COMMISSIONER OF C. EX., MUMBAI
+ 2010-TIOL-988-CESTAT-MUM - COMMR. OF CUS.,C.EX. & S.T., NAGPUR Versus SUNFLAG IRON & STEEL CO. LTD.
+ 2014-TIOL-1102-CESTAT-MUM - MONARCH CATALYST PVT. LTD. Versus COMMISSIONER OF C. EX., THANE-I
The Division Bench also noted that the very same Member (Technical) who passed the order in the Nakshtra case (supra) had also passed final orders on similar issue sitting in Single Member Bench, some of those cases are as cited below -
+ Raymond Ltd. Versus Commissioner of C. Ex., Mumbai-III - 2014-TIOL-86-CESTAT-MUM
+ Kalyani Hayes Lemmerz Ltd. Versus Commissioner of C. Ex., Pune - III - 2012-TIOL-1021-CESTAT-MUM
+ Crown Products Pvt. Ltd. Versus Commissioner of Central Excise, Nashik - 2012-TIOL-975-CESTAT-MUM
The Division Bench, therefore, held that similar cases involving an amount of Rs.50Lacs and below should be heard by Single Member Bench.
The registry was directed to list the appeal before the Single Member Bench on 05/02/16.
(See 2016-TIOL-151-CESTAT-MUM)
