I. HIGH COURT
25. [2020-TIOL-1285-HC-AHM-ST] M/s. Linde Engineering India Pvt. Ltd. vs.
Union of India Date of order: 16th January, 2020
Services rendered by a
company located in India to its holding company outside India not being
establishments of distinct persons, are considered as export of service
FACTS
The petitioner is engaged
in providing services in India and outside India. Service is provided to their
holding company located outside India. A show cause notice was issued alleging
that the services provided to the holding company being merely an establishment
of a distinct person, cannot be considered as export of service and would fall
within the definition of exempted service, and therefore Rule 6(3) of the
CENVAT Credit Rules, 2004 is applicable and hence a demand is raised for
reversal of credit.
HELD
The Court noted that the
demand is raised on mere misinterpretation of the provisions of the law. The
petitioner and its parent company can by no stretch of the imagination be
considered as the same entity. The petitioner is an establishment in India
which is a taxable territory and its 100% holding company, which is the other
company in the non-taxable territory, cannot be considered as establishment so
as to treat them as distinct persons for the purpose of rendering services.
Thus, services provided to its holding company are considered as export of
service as per Rule 6A of the Service Tax Rules, 1994.
II. TRIBUNAL
26. [2020-TIOL-1178-CESTAT-ALL] M/s Encardio-Rite Electronics Pvt. Ltd. vs.
Commissioner of Appeals, Central Excise and Service Tax Date of order: 25th November, 2019
Even though the
sub-contractor and the main contractor are located in the taxable territory,
since the service is consumed in the state of Jammu and Kashmir the service is
not taxable
FACTS
The appellants are sub-contractors
engaged in laying of tracks for the Indian Railways and work associated with the construction of dams. The entire activity is performed in the state of
Jammu and Kashmir. The Revenue argues that since both the sub-contractor and
the main contractor are located in the taxable territory in view of Rule 6 of
the Taxation of Services (Provided from Outside and Received in India) Rules
2006 as well as Rule 8 of the Place of Provision of Service Rules, 2012, the service is taxable and therefore tax is leviable.
HELD
The Tribunal primarily
noted that the services were provided and consumed in the state of Jammu and
Kashmir. It was held that the provisions of the rule cannot override provisions
of the sections provided in the Act. Section 64 clearly lays down that provisions
of Chapter V of the Finance Act, 1994 which deals with service tax are not
applicable in the state of Jammu and Kashmir. Accordingly, since the service is
consumed in a non-taxable territory, the demand of service tax is not
sustainable.
27. [2020-TIOL-1167-CESTAT-CHD] State Bank of India vs. Commissioner
(Appeals) of CGST, Ludhiana Date of order: 27th February, 2019
Refund cannot be rejected
on technical grounds that the payment of tax sought to be refunded was made in
a wrong service code
FACTS
The appellant is a banking
company providing banking and financial services. They received services from a
contractor and discharged service tax under reverse charge on works contract
service. However, while making the payment the same was made under the category
of banking and financial services. Since they were not required to pay service
tax under reverse charge, they filed a refund claim. The claim was rejected on
the ground that they have failed to show that the payment was made under works contract
service.
HELD
The Tribunal noted that
whatever service tax was payable by the appellant has been paid under banking
and financial services. They have also produced a certificate issued by the
chartered accountant showing that the service tax of which the refund claim is
filed is none other than the works contract service. The Tribunal accordingly
held that the refund claim cannot be rejected on technical grounds and the
appeal was allowed.
28. [2020-TIOL-1166-CESTAT-CHD] M/s Hitachi Metals India Pvt. Ltd. vs.
Commissioner of Central Excise and Service Tax Date of order: 3rd April, 2019
The provisions of section
11B are not applicable when tax is not required to be paid
FACTS
The appellant entered into
an agreement with a foreign company for promotion of products in India by way
of customer identification and contact, communication to or from, inquiries
relating to business, co-operate with and represent companies in its
promotional efforts, etc. Due to confusion and lack of clarity, the appellant
paid service tax during the period from April, 2006 to February, 2008 for the
services provided to their foreign-based service recipient for the payment
received against the services in convertible foreign exchange. A refund claim
was filed which was rejected on the ground that the same is filed beyond the
time limit prescribed u/s 11B of the Central Excise Act, 1944. Accordingly, the
present appeal is filed.
HELD
The
Tribunal relying on the decision in the case of National Institute of
Public Finance and Policy vs. Commissioner of Service Tax
[2018-TIOL-1746-HC-DEL-ST] held that since the appellant was not liable
to pay service tax, the time limit prescribed u/s 11B of the Central Excise
Act, 1944 for filing of refund claim is not applicable.
