I. TRIBUNAL
4 Convance Clinical Development Ltd. vs. Commissioner of Central Excise, Bengaluru East [2021 (50) GSTL 433 (Tri-Bang)] Date of order: 2nd July, 2021
Rule 5 of the CENVAT Credit Rules, 2004 read with Notification No. 27/2012-CE dated 18th June, 2012 – Refund cannot be rejected on the ground that the reversal of credit was not made through service tax return
FACTS
The appellant is a 100% export company and it had filed a refund application under Rule 5 of the CENVAT Credit Rules, 2004 read with Notification No. 27/2012-CE dated 18th June, 2012 for claiming the refund of unutilised CENVAT credit. But it inadvertently transferred the CENVAT credit to the GST regime through Form GST TRAN-1. On realising the mistake, the appellant voluntarily reversed the said credit in the GSTR3B return filed for the month of May, 2018. However, the refund claim was rejected because the appellant had failed to debit the refund amount in the CENVAT credit account, the ST-3 return and Form A at the time of filing the refund claim, and in terms of the conditions specified under Notification No. 27/2012-CE dated 18th June, 2012.
HELD
The Tribunal observed that as per Notification No. 27/2012-CE dated 18th June, 2012, there was no requirement to debit the amount of refund claimed in the service tax return. The only condition under condition 2(h) of the said Notification No. 27/2012-CE is that the amount that is claimed as refund shall be debited by the claimant from his CENVAT credit account, maintained in the books of accounts at the time of making the claim. This condition was followed before filing the refund claim. The Tribunal also found that transition of credit to the GST regime is merely a procedural lapse which was rectified by the appellant by way of reversal in GSTR3B. Therefore, the Learned Commissioner (Appeals) should have taken a liberal view of a bona fide mistake without any intention to claim unjustified refund. Hence, the order was set aside, allowing the appeal.
5 M/s International Travel House Ltd. vs. Commissioner of Service Tax, Delhi [2021-TIOL-620-CESTAT-Del] Date of order: 17th September, 2021
Incentive received from airlines by air travel agents is not liable for service tax
FACTS
The appellant, an air travel agent, purchased tickets from various IATA Agents / Airlines which pay commission to them. A show cause notice was issued demanding service tax on the commission received. The appellant’s case was that the air travel agent is neither promoting its own business nor of the CRS Companies. Therefore, the receipt of incentive / commission from the airline cannot be liable for service tax.
HELD
The Tribunal, relying on the decision in the case of Kafila Hospitality and Travel Private Limited vs. Commissioner of Service Tax, Delhi [2018-TIOL-3504-CESTAT-Del] held that the incentives received by a service recipient from a service provider cannot be subjected to levy of service tax and a passenger cannot be deemed to be an audience for promotion of the business of CRS Companies.
6 Jay Jee Enterprises vs. CCE&ST, Daman [2021-TIOL-643-CESTAT-Ahm] Date of order: 20th September, 2021
Service recipient discharged 100% service tax instead of 75% on supply of manpower service and security service. Since tax is paid in full, the service recipient is allowed full input tax credit
FACTS
The issue involved is whether the appellant is entitled to CENVAT credit in respect of service tax paid on Manpower Supply and Recruitment Agency Service and Security Service under Reverse Charge Mechanism when the service tax was 100% paid by the appellant as a service recipient. However, Notification No. 30/2012-ST dated 20th June, 2012 provides that the service provider is supposed to pay the service tax on 25% of the value of the service and the service recipient is required to pay the service tax on 75% of the value of the service. The contention of the Revenue is that in the present case even the portion of the service tax which is liable to be paid by the service provider was paid by the service recipient; therefore, the appellant is not eligible for CENVAT credit. Being aggrieved by the impugned order, the present appeal has been filed.
HELD
The Tribunal primarily noted that whether it is the service recipient or the service provider who is liable to pay the service tax, so long as the service tax was admittedly paid even by the recipient of the service, the CENVAT credit cannot be denied. The credit was accordingly allowed.
