VKJ Latest News Update

VKJ Law Offices of Vinay K. Jain Advocates & Solicitors

ST – 17/2011-ST not furnishing declaration in Form A-1 – It is not that the assessee had not rendered the service which was consumed in SEZ, rather the denial is made for non-compliance with a procedural requirement which is not correct: CESTAT

2019-TIOL-2064-CESTAT-MAD

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
COURT: SM-B3

Appeal No. ST/42129/2018

Arising out of Order-in-Appeal No. 210/2018(CTA-II), Dated: 12.06.2018
Passed by the Commissioner of GST and CE (Appeals-II) Chennai

Date of Hearing: 17.01.2019
Date of Decision: 23.01.2019

M/s V STEPHEN

Vs

COMMISSIONER OF GST AND CENTRAL EXCISE
(CHENNAI-SOUTH)

Appellant Rep by: Shri R Viswanathan, CA
Respondent Rep by: Shri L Nandakumar, AC (AR)

CORAM: P Dinesha, Member (J)

ST – Service tax was sought to be recovered by Revenue vide SCN alleging that the assessee claiming to be covered under Notfn 17/2011-ST did not furnish declaration in Form A-1 for claiming the benefit of exemption in terms of the Notification – The issue of providing service and the service being consumed at SEZ is not in dispute and it is also undisputed that the service recipient viz. M/s. Perlos closed down its business and hence, Form A1 could never be obtained and hence non-furnishing of Form A1 is not deliberate, which was beyond the control of assessee – The Supreme Court in case of Mangalore Chemicals & Fertilizers Ltd. – 2002-TIOL-234-SC-CX has clearly laid down that procedural infraction of notifications and circulars are condonable and would not coming in the way of extending substantial benefit, if otherwise found eligible – Similarly in the case on hand, it is not that the assessee had not rendered the service which was consumed in SEZ, rather the denial is made for non-compliance with a procedural requirement which is not correct in the light of the decision of Apex Court – The demand cannot sustain, for which reason the impugned order and the demand are set aside: CESTAT

Appeal allowed

FINAL ORDER NO. 40154/2019

Service tax was sought to be recovered by the Revenue vide the Show Cause Notice (SCN) dated 23.03.2017, alleging that the assessee claiming to be covered under Notification No. 17/2011-ST dated 01.03.2011 did not furnish declaration in Form A-1 for claiming the benefit of exemption in terms of the above Notification. Vide Order-in-Original dated 18.01.2018, the exemption was thus denied and the proposed demand in the SCN was confirmed and so also the demand upheld, in the Order-in- Appeal. Aggrieved, the assessee is in appeal before this forum.

2. When the matter was taken up for hearing today, Shri R.Viswanathan, CA appeared on behalf of the assessee and the Ld. DR, Shri L. Nandakumar, AC, appeared for the Revenue.

3. I have considered the rival contentions, perused the documents, orders placed in record and also gone through the judgments relied on during the course of hearing. The moot question is, whether the denial of substantial relief be made for non-compliance with a procedure? The undisputed fact is that the appellant during the impugned period rendered its services to the recipient situated at Special Economic Zone (SEZ) and hence the services were consumed within the SEZ. It is the case of the appellant that during the impugned period, he rendered services to M/s. Perlos Telecommunication & Electronics Components India Pvt. Ltd. (in short M/s. Perlos) situated at M/s. NokiaTelecom Special Economic Zone-SEZ, Kancheepuram; that M/s. Perlos had closed its business for which reason the appellant could not obtain Form A1; etc.

4.1 I find the issue of providing service and the service being consumed at SEZ is not in dispute and it is also undisputed that the service recipient viz. M/s. Perlos closed down its business and hence, Form A1 could never be obtained and hence nonfurnishing of Form A1 is not deliberate, which was beyond the control of the appellant. The Hon’ble Supreme Court in the case of Mangalore Chemicals & Fertilizers Ltd. Vs. DC – 1991 (8) TMI 83 (S.C) = 2002-TIOL-234-SC-CX has clearly laid down that procedural infraction of notifications, circulars, etc. are condonable and would not coming in the way of extending substantial benefit, if otherwise found eligible. Similarly in the case on hand, it is not that the appellant had not rendered the service which was consumed in the SEZ, rather the denial is made for non-compliance with a procedural requirement which according to me is not correct, in the light of the decision of the Apex Court, supra.

4.2 In view of the above discussions, I am of the considered opinion that the demand cannot sustain, for which reason the impugned order and the demand are set aside.

5. Appeal is allowed with consequential benefits, if any, as per law.

(Order pronounced in the open Court on 23.01.2019)

Leave a Reply

Close Menu
%d bloggers like this: