I. TRIBUNAL
21 Shri S. Sakhtikumar vs. The Commissioner of GST and Central Excise [2022-TIOL-139-CESTAT-MAD] Date of order: 2nd December, 2021
Service tax paid by mistake cannot be barred by limitation and ought to be refunded
FACTS
Appellant had taken on lease the maintenance of toilets at the Central Bus Stand and the New Bus Stand at Tirunelveli in 2017. It was noticed that Tirunelveli Municipal Corporation had collected service tax from the appellant for the above services and paid the same in the Government treasury. Subsequently, it was noticed that the said service forming a part of Article 243W is exempted from payment of service tax. A refund claim was filed with respect to the above in 2019. A show-cause notice was issued rejecting the claim on the ground of time bar.
HELD
The Tribunal relied on the decision in the case of M/s 3E Infotech vs. CESTAT, Chennai [2018(18) GSTL 40 (Mad.)] which is binding and where it is laid down that when service tax is paid by mistake a claim for refund cannot be barred by limitation, merely because the period of limitation under section 11B had expired. Such a position would be contrary to the law laid down by the Hon’ble Apex Court, and therefore we have no hesitation in holding that the claim of the Assessee cannot be barred by limitation and ought to be refunded. In view of the above decision of the Hon’ble jurisdictional High Court, the rejection of refund is unsustainable. Hence, the impugned order of the First Appellate Authority is set aside.
[Note: Readers may also refer to a similar decision in the case of Ishwar Metal Industries vs. CCE & CGST dated 28th January, 2022 reported at [2022-TIOL-133-CESTAT-DEL]]
22 V.V. Minerals vs. Commissioner of GST & Central Excise, Madurai [2022 (56) GSTL 167 (Tri. – Chennai)] Date of order: 4th June, 2021
Refund of service tax paid by the exporter cannot be denied merely because the supplier of goods had violated the provision of local law
FACTS
Appellant is a 100% Export Oriented Unit engaged in the manufacture and export of ‘Garnet’ and ‘Super Garnet’. They had filed a refund claim of service tax paid for May 2016 to December 2016. It came to the knowledge of the department from the District Level Committee of Tirunelveli District about illegal mining of beach sand and unlawful transportation thereof. Respondents were of the view that Appellant was not eligible for the refunds claimed, inasmuch as, the sands had been exported by way of illegal mining and unlawful transportation. The Commissioner (Appeals) also rejected the refund claim of the Appellant. Being aggrieved by the order rejecting refund, the Appellant preferred this appeal before the Hon’ble Tribunal. Appellant submitted before the Hon’ble Tribunal that allegation of illegal mining was against M/s. V. V. Minerals [Mines], whereas the export is made by M/s. V. V. Minerals [100% EOU], which is a different entity from M/s. V. V. Minerals [Mines]. Appellant procures minerals from other licence holders and exports the goods after further processing. Since Appellant does not have any mining lease, the recommendation by District Level Committee is not applicable to them.
HELD
It was observed that merely because M/s. V.V. Minerals [Mines], i.e. supplier of goods, has committed violation of a local law, M/s. V. V. Minerals [100% EOU], i.e. the exporter who procured goods cannot be put into adverse situations, especially when there was no evidence with respect to abetment or collusion on the part of the exporter. Since all the conditions specified in Notification No. 41/2012-ST, which are necessary for a refund of service tax paid, are fulfilled, the Appellant is eligible for the refund of service tax, and the order rejecting refund was set aside.
23 Vandana Global Ltd. vs. Commr. of CGST, Central Excise & Customs, Raipur [2022 (56) GSTL 310 (Tri. – Delhi)] Date of order: 23rd June, 2021
Extended period of limitation cannot be invoked by alleging suppression of availment of CENVAT credit on ineligible services, where regular audit was conducted by the Department
FACTS
Appellant was engaged in the manufacture of Sponge Iron, M.S Billets and ‘Dolachar’. During the audit by Auditor General Raipur, it was noticed that during April 2012 to March 2016, CENVAT credit was availed on various input services such as membership fees, construction services, rent-a-cab services, general insurance of vehicles, repair services, etc. that were not ‘input services’. Assistant Commissioner disallowed CENVAT credit availed on car insurance, repair and maintenance of motor vehicles. Further, Commissioner Appeals also disallowed the CENVAT credit and being aggrieved by such disallowance; Appellant preferred an appeal before the Tribunal.
HELD
Tribunal held that since the records of Appellant was regularly audited by the Audit Authority, department had knowledge about the affairs including availment of CENVAT credit. As a result, invocation of the extended period of limitation was not available to the Revenue, and hence the impugned order was set aside.
24 Microsoft India (R&D) Pvt. Ltd. vs. Commr. of C. EX. & S.T., Bangalore [2022 (56) GSTL 29 (Tri-Bang.)] Date of order: 26th July, 2021
Department is estopped from taking a contrary view than the view taken for the previous period unless the order passed for the prior period is revised by the competent authority
FACTS
Appellant was engaged in providing customer care and product support services in relation to Microsoft Software products to the customers of Microsoft located in India and abroad. Appellant provides these services through its Global Technical Support Centre (GTSC), a 100% Export Oriented Unit located in Bangalore. The major portion of Appellant’s turnover qualifies as export of services, which results in accumulation of CENVAT credit on various input services. Appellant had been regularly filing refund claims of such accumulated credit. For the period April 2010 to March 2011, Appellant was denied CENVAT credit availed on event management service, outdoor catering, mandap service and rent-a-cab service mainly on the two grounds: firstly, there was no nexus between input services and output services and secondly, that absence of such input services will not directly have an impact on the quality and efficiency of its output services. Being aggrieved by the order of Commissioner, the Appellant preferred an appeal before the Honourable Tribunal.
HELD
It was held that the Appellant had given full justification and established nexus of all the above-mentioned services. Further, Appellant’s refund applications for the previous periods for the same input services were allowed. Tribunal pointed out the Principal of Consistency and held that once the nexus has been accepted by the department for the previous period, such nexus cannot be denied for a subsequent period. There cannot be two different yardsticks; one for allowing refund and another for deciding the eligibility of CENVAT credit. In view of this, the impugned order denying CENVAT credit was set aside, and the appeal was allowed.
25 Commissioner of CGST and Central Excise vs. M/s Ethics Infra Development Pvt. Ltd. [2022-TIOL-97-CESTAT-MUM] Date of order: 21st December, 2021
Service tax is not leviable on the activity of construction of residential complex to existing members as there is an absence of sale – Also when the service tax is discharged on the gross consideration received from new buyers there is no question of levy of service tax from the existing members
FACTS
Appellant is providing taxable service of re-development of residential complex. It was observed during audit that the assessee did not discharge service tax on services of construction of residential complex services rendered by them towards the flats allocated to existing members. It was noted that from 1st July, 2012 these services had become classifiable as ‘declared service’ under section 66E(b) of the Finance Act, 1994. Its valuation method also had been highlighted vide CBEC Circular no. 151/2/2012-ST dated 10th February, 2012 read with High-Level Committee clarification issued vide Board’s letter F. No. 354/311/2015-TRU dated 20th January, 2016. The adjudicating authority observed that flats given to existing members cannot be considered a sale and hence is outside the ambit of service tax. It was noted that the entire income in the present transaction had been generated from the sale of flats to customers other than the existing society members because those members were provided flats free of cost. Accordingly, the demand was set aside. Being aggrieved by the said order, revenue filed an appeal.
HELD
The Tribunal primarily noted that in the present case, the respondent had discharged the complete service tax liability on the consideration received by him for providing the taxable services to the buyers of the flats that the respondent could sell in an open market. Further, it was also observed that there was no material change in the provisions of law relating to construction service in the negative list based taxation. Hence the Circulars relied upon by the adjudicating authority were applicable. Once the tax liability was discharged on the consideration received from the service in respect of flats to new buyers, the demand of service tax for the flats handed over to the existing members of the societies without any consideration cannot be sustained. Reliance was placed in the case of Vasantha Green Projects [2019 (20) GSTL 568 (THyd)]. The Appeal of the revenue was accordingly dismissed.
