We are sharing with you some important judgments under the Service Tax on the following issues:
1. Refund claim cannot be rejected merely on ground of mentioning wrong Notification number and without issuing SCN
Monarch Catalyst (P.) Ltd. Vs. Commissioner of Central Excise [(2015) 56 taxmann.com 421 (Mumbai - CESTAT)]
Whether Refund claim can be rejected merely on ground of mentioning wrong Notification number and without issuing SCN?
In instant case, Monarch Catalyst (P) Ltd. (“the Appellant”) was engaged in export of goods and for that purpose availing services of certain commission agents located abroad (“Impugned services”) on which Service tax paid under Reverse Charge. Accordingly the Appellant filed the refund claim under Notification No. 18/2009-ST dated July 7, 2009. However, while filing the refund claim by mistake instead of mentioning Notification No. 18/2009-ST, dated July 7, 2009, they mentioned Notification No. 17/2009-ST, dated July 7, 2009 which did not cover the Impugned services. The Department rejected refund claim as not maintainable under Notification No. 17/2009-ST dated July 7, 2009 but did not issue SCN or grant personal hearing.
The Hon’ble CESTAT, Mumbai held that the refund claim could not have been rejected without issuing SCN or granting personal hearing merely because wrong Notification number was mentioned.
Hence, the matter was remanded back for consideration of refund claim afresh under correct Notification No. 18/2009-STdated July 7, 2009.
2. Tribunal cannot adopt a different approach and order pre-deposit in other matters involving same issue when in earlier matters pre-deposit was waived
Swift Talk Vs. Chief Commissioner of Central Excise [(2015) 57 taxmann.com 169 (Himachal Pradesh)]
Whether the Tribunal is justified in adopting different approach and ordering pre-deposit in other matters involving same issue when in earlier matters pre-deposit was waived?
In the instant case, the Hon’ble Tribunal directed Swift Talk (“the Appellant”) to deposit Rs. 3 Lakhs as pre-deposit for hearing the case on merit by the Ld. Commissioner (Appeals).The Appellant argued that the Hon’ble Tribunal has adopted discriminatory approach in respect of same controversy and vide its earlier decisions in case of other dealers, pre-deposit was waived and the matter was remanded back to the Ld. Commissioner (Appeals) for hearing on merits.
The Hon’ble High Court of Himachal Pradesh held that it could not be understood why different approach has been adopted in case of another dealer raising similar question and not resorting to order of remand, as was order passed in case of other assessees. Hence, pre-deposit was waived and the matter was remanded back to the Ld. Commissioner (Appeals) for hearing on merits.
3. Marketing and support services to foreign companies in relation to Indian sales of foreign companies is Export of Services prior to October 1, 2014 and the Department cannot raise a ground related to facts of the case first time in Writ Petition
Commissioner of Service Tax Vs. Tandus Flooring India (P.) Ltd. [(2015) 57 taxmann.com 48 (Karnataka)]
Whether marketing and support services to foreign companies in relation to Indian sales of foreign companies isan Export of Service and whether the Department is allowed to raise a ground related to facts of the case first time in Writ Petition?
In instant case, Tandus Flooring India (P.) Ltd. (“the Respondent”), was to undertake the responsibility of providing marketing and sales support for distribution of floor coverings or carpet manufactured outside India by its holding company “Tandus Singapore” and sold to customers in India through their own dealers or directly (“Impugned service”).
After considering the provisions of Rule 6A of the Service Tax Rules, 1994 (“the Service Tax Rules”) as well as Rule 3 of the Place of Provision of Services Rules, 2012 (“the POP Rules”) and also on the concession made by the Commissioner of Service Tax, Authority for Advance Ruling (“AAR”) ruled that the place of provision of Impugned service shall be the location of the service recipient in term of Rule 3 of the POP Rules and thus it would constitute export of service, not liable to Service tax.
The Commissioner filed Writ Petition challenging the said ruling of on ground that Impugned services were 'intermediary services' and would be taxed based on location of agent under Rule 2(f) and 9(c) of the POP Rules.
The Hon’ble High Court of Karnataka held that an Order which has been passed on a concession given by the Commissioner cannot be challenged by the Commissioner himself. Further, the argument of intermediary service when not raised before AAR cannot be raised first time in Writ petition, especially, when the same is a ground relatable to facts and not solely on a question of law.
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