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ST – Refund cannot be rejected solely because an appeal has not been filed against self-assessment: CESTAT

2019-TIOL-1993-CESTAT-BANG

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, BANGALORE

Appeal No. ST/20015/2018-SM

Arising out of Order-in-Appeal No. 200/2017-CT, Dated: 08.09.2017
Passed by the Commissioner of Central Tax, Bangalore North, Bangalore-I (Appeals)

Date of Hearing: 22.04.2019
Date of Decision: 25.04.2019

TRACTOR AND FARM EQUIPMENT LTD
PLOT NO.1, KIADB INDUSTRIAL AREA, DODDABALLAPUR
BANGALORE – 561203 KARNATAKA

Vs

COMMISSIONER OF CENTRAL TAX
BANGALORE NORTH, NO.59, HMT BHAWAN GROUND FLOOR
BELLARY ROAD BANGALORE – 560032 KARNATAKA

Appellant Rep by: Mr Vishwasai, Adv.
Respondent Rep by: Mr Kanipakam Murali, Superintendent (AR)

CORAM: S S Garg, Member (J)

ST – The assessee-company provides services such as transport of goods by road, GTA service, BAS & Consulting Engineer Service – The assessee filed a refund claim in respect of excess service tax paid on GTA service during the relevant month – On adjudication, the major portion of the refund was sanctioned while the remaining sum was adjusted against refund payable in respect of delayed payment of tax – The Department filed an appeal against such order before the Commr.(A) and the same was allowed – Hence the present appeal by the assessee.

Held: The Commr.(A) allowed the Revenue’s appeal by relying on the Apex Court’s decision in Flock (India) Pvt. Ltd. and Priya Blue Industries Ltd. Vs. Commissioner – The assessee’s counsel claimed that such cases are inapplicable in the present case since there is self-assessment involved – It is also claimed that refund cannot be rejected solely because an appeal has not been filed against the self-assessment – Considering the Tribunal’s decision in Premier Agencies Vs. CCE, Nagpur and Gimatex Industries Pvt. Ltd. Vs. CCE, Nagpur the O-i-A in challenge is unsustainable and merits being quashed: CESTAT

Assessee’s appeal allowed

Case laws cited:

Flock (India) Pvt. Ltd – 2002-TIOL-208-SC-CX… Para 3

Priya Blue Industries Ltd. Vs. Commissioner – 2004-TIOL-78-SC-CUS… Para 3

Premier Agencies Vs. CCE, Nagpur – 2010-TIOL-853-CESTAT-MUM … Para 3…followed

Gimatex Industries Pvt. Ltd. Vs. CCE, Nagpur – 2010-TIOL-425-CESTAT-MUM … Para 3…followed

FINAL ORDER NO. 20362/2019

Per: S S Garg:

The present appeal is directed against the impugned order dated 08.09.2017 passed by the Commissioner (Appeals) whereby the Commissioner (Appeals) has allowed the Department’s appeal and set aside the Order-in-Original. Briefly the facts of the present case are that the appellant is engaged in providing taxable services under transport of goods by road/goods transport agency service, Business Auxiliary Service, Consulting Engineer Service etc. The appellant filed a refund claim on 23.04.2015 for Rs. 3,24,290/- (Rupees Three Lakhs Twenty Four Thousand Two Hundred and Ninety only) in respect of excess service tax paid on GTA services during the month of May 2014. During the adjudication proceedings, the Deputy Commissioner has found that the total service tax payable on the gross value of Rs. 18,35,766/- (Rupees Eighteen Lakhs Thirty Five Thousand Seven Hundred and Sixty Six only) under reverse charge was Rs. 56,756/- (Rupees Fifty Six Thousand Seven Hundred and Fifty Six only) but the assessee had actually paid an amount of Rs. 3,81,046/- (Rupees Three Lakhs Eighty One Thousand and Forty Six only) vide E-receipt dated 5.6.2014 without claiming 75% abatement. It was therefore found that the assessee has paid excess service tax of Rs. 3,24,290/- (Rupees Three Lakhs Twenty Four Thousand Two Hundred and Ninety only) in respect of GTA services during May 2014 for which refund claim was before the Deputy Commissioner of Service Tax, Bangalore. The sanctioning authority sanctioned refund of Rs. 3,17,981/- (Rupees Three Lakhs Seventeen Thousand Nine Hundred and Eighty One only) and adjusted Rs. 6,306/- (Rupees Six Thousand Three Hundred and Six only) against interest payable in respect of some delayed payment of service tax. Thereafter the Department reviewed the order of the Deputy Commissioner and filed an appeal before the Commissioner (Appeals) who accepted the Department’s appeal.

2. Heard both the parties and perused the records.

3. Learned counsel for the appellant submitted that the impugned order passed by the Commissioner (Appeals) is not sustainable in law as the same has been passed without properly appreciating the facts and the law. He further submitted that the review order passed by the Department is not valid as the review order has been passed under Sub section 2 of Section 35E of the Central Excise Act, 1944 whereas the present case relates to Service Tax and the power of review lies under Section 84 of the Finance Act. On merit the learned counsel submitted that the Commissioner (Appeals) has allowed the Department’s appeal by relying upon the decision of the Hon’ble Apex Court in the case of Flock (India) Pvt. Ltd. reported in 2000 (120) E.L.T. 285 (S.C) = 2002-TIOL-208-SC-CX and Priya Blue Industries Ltd. Vs. Commissioner reported in 2004 (172) E.L.T. 145 (S.C) 2004-TIOL-78-SC-CUS He further submitted that the said decisions of the Apex Court are not applicable in the present case where there is a self assessment. He further submitted that the refund claim cannot be rejected on the sole basis that an appeal has not been filed against the self assessment. He also submitted that the ST-3 returns for April to September 2014 was filed by the appellant which in law deemed as self assessment and filing an appeal against the self assessment would not be tenable under law. He further submitted that this case is squarely covered by the decision of this Tribunal in the following cases:

a. Premier Agencies Vs. CCE, Nagpur – 2010 (18) S.T.R. 668 (Tri.-Mumbai) = 2010-TIOL-853-CESTAT-MUM

b. Gimatex Industries Pvt. Ltd. Vs. CCE, Nagpur – 2010 (261) E.L.T. 1026 (Tri.-Mumbai) = 2010-TIOL-425-CESTAT-MUM

4. On the other hand the learned AR defended the impugned order.

5. After considering the submissions of both the parties and perusal of the material on record, I find that in the present case the appellant by mistake has paid excess service tax and on realizing his mistake he filed a refund claim and thereafter a show-cause notice was issued to reject the refund claim on the ground of non submission of the documents. Further the appellant furnished all the required documents which were considered by the original authority and after considering the documents sanctioned the refund claim of Rs. 3,17,984/- (Rupees Three Lakhs Seventeen Thousand Nine Hundred and Eighty Four only) in respect of the excess service tax paid on GTA during month of May 2014 under Section 11B of the Central Excise Act 1944 read with Section 83 of the Finance Act. Against the said decision, the Department after reviewing the order has filed the appeal before the Commissioner (Appeals) on the ground that the assessment has not been challenged and therefore without challenging the assessment, refund cannot be claimed. The Commissioner (Appeals) by relying upon the decision in the case of Flock (India) Pvt. Ltd. and Priya Blue Industries Ltd. has allowed the Revenue’s appeal. In fact the decision in the case of Flock (India) Pvt. Ltd. and Priya Blue Industries Ltd. are not applicable in the facts and circumstances of this case and both the decisions have been distinguished by the Tribunal in the case of Premier Agencies and Gimatex Industries Pvt. Ltd. cited supra wherein identical facts were involved. It is pertinent to reproduce the relevant findings of the Tribunal in the above said case which is recorded in para 5 & 6.

“5. After hearing both sides, I find that the issue involved in this case is as to whether the appellants are entitled for filing the refund of Service f Tax paid as per their own assessment without challenging the same? The refund claim of the appellants are denied by the lower authorities following the rule laid down by the Apex Court in the case of Flock (India) Ltd. and Priya Blue Industries (supra). In the case of Flock (India) Ltd. (supra), the facts of the case are that “the respondent filed the classification list, in which it was claimed that said product comes under the tariff item 22A and the Assistant Commissioner after examining the contents of the product and the particulars furnished by the respondent passed an order holding that the product in question is classifiable under tariff item 22B and not under tariff item 22A and the applicable rate of duty would be 25% ad valorem. In the said order the Assistant Commissioner expressly stated that the assessee may prefer an appeal against his order to the Commissioner (Appeals).” The assessee neither challenged the said order by filing any appeal nor did it pay the duty under protest. That is not the circumstances in this case. The learned DR further relied on Chief Engineer (Designs), Karnataka Power Corporation Ltd. v. Commissioner of Customs, Chennai – 2007-TIOL-1562-CESTAT-MAD, wherein also the case was of customs and reassessment of the goods were done. Hence, the reliance placed by the DR in this case is not relevant at all and they are also of no help to the Revenue.

6. On the other hand, going through the facts and circumstances of the case, I find that it is a case where the appellants have paid Service Tax on their own and on finding that they are not liable to pay the Service Tax, they filed a refund claim. There was neither assessment made by the Central Excise officer, nor any decision taken-by the Central Excise officer and nothing is available on record. Hence, the question of challenging the assessment does not arise at all. Further, the reliance placed by the learned Advocate are squarely applicable in this case and in the case of Nagpur Transwell Power Pvt. Ltd. v. Commissioner of Central Excise, Nagpur – 2009 (243) E.L.T. 459 (Tri.-Mum.) = 2009-TIOL-1392-CESTAT-MUM, while disposing of the stay application this Tribunal has clearly held that proposition that “assessment” includes “self assessment” is not correct for purpose of appeal under Section 35F of the Central Excise Act, 1944. The appeal under Section 35 ibid is preferable to Commissioner (Appeals) against order/decision by subordinate Central Excise officer. It is difficult to envisage that the said provision of law provides for an appeal against self-assessment. The same view was taken by this Tribunal in Appeal No. E/40/09 in the case of M/s. Gimatex Industries Pvt. Ltd = 2010-TIOL-425-CESTAT-MUM. decided on 10-2-2010.”

The ratio of the decision cited supra is applicable in the present case and by following the said ratio, I am of the considered opinion that the impugned order is not sustainable in law and therefore I set aside the same by allowing the appeal of the appellant with consequential relief, if any.

(Order was pronounced in Open Court on 25.04.2019)

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