A. Appeal / Limitation

1. If an assessee could not take up any point involving fact and law before the first forum, it does not necessarily create a bar to take up before the First Appellate forum, it such point clinches the issue. The Tribunal itself could have remanded the matter to adjudicating authority on the basis of very vital point raised by the assessee before it. The learned Tribunal has failed to exercise its jurisdiction while passing the order.

Held: Order of the Tribunal was set aside and directed the Commissioner (Appeals) to verify the contention of the appellant and pass the appropriate order.

[Sri Balaji Service Station v. CESTAT – 2017(51) STR 484 (AP)]

2. The appellant has not received the Order-in-Appeal dated 15-12-2009 passed by the Commissioner (Appeals). The appellant sought for certified copy of the order on 13-12-2011 and was provided on 12-1-2012. On filing the appeal against the order the Tribunal with an application to condone the delay, the Tribunal has rejected the application. Held : Taking date of order of Commissioner (Appeals) as relevant date is not proper, as said order was not served on the appellant in time. Appellant having belated received certified copy of the order, appeal filed before Tribunal is not delayed. Hence, Tribunal should condone delays where contentious issues with regard to merit and reasons for delayed filing of appeals are raised. Order dismissing the appeal set aside.

[OSA Shipping P Ltd., v. CCE, Chennai – 2017(51) STR 127(Madras)]

B. Export of Service

The assessee, 100% EOU rendering “Scientific or Technical Consultancy Service” have entered into agreement with a company registered in Japan for generation of candidate compounds for pharmaceutical products on certain drug targets and using information supplied by the client. The assessee availed CENVAT credit on inputs/input services as per Cenvat Credit Rules, 2004 and claimed refund of unutilised CENVAT credit. The original authority has partly sanctioned the refund and rejected some refund claims. The assessee has disputed the rejection before the First Appellate Authority and the Commissioner of CE has directed the original authority to challenge the sanction of the other refunds. The First Appellate Authority has allowed the appeal of the assessee and rejected appeal of the Revenue. The Revenue is before the CESTAT, Held : Since ingredients which crystallise activity as export of service for the purposes of Rule 6A of Service Tax Rules, 1994, viz., that provider of service is in taxable territory, that recipient is outside India, that service is not in ‘negative list’, that payment received in convertible foreign exchange and that provider and recipient not covered by fiction in Explanation 2(b) of Section 65B(44) of the Finance Act, 1994 are present in the facts of this case Revenue’s appeal is dismissed.

[Principal CCE v. Advinus Therapeutics Ltd. – 2017(51) STR 298 (Tri – Mumbai)]

C. Interest on delayed refund

The petitioner-company became entitled for refund of Central Excise Duty as a result of its appeal being allowed by the Collector(Appeals), Ghaziabad by the order dated 3-5-1991. The company filed the application for refund on 5-8-1991. It remained pending with the authorities in spite of repeated reminders by the petitioner-company. On filing of WP before the HC, the Hon’ble Allahabad HC has directed the Revenue to decide the claim of the petitioner for refund. The authority has passed an order dated 20-8-2009 rejecting the application for refund filed on 5-8-1991. The Commissioner (Appeals) has allowed the appeal of the petitioner with a direction to refund the amount to the petitioner. The lower authorities have sanctioned the refund on 5-8-2010. Since no interest was paid for the delayed period of refund the petitioner has filed WP before the Hon’ble HC. Held: Interest liability on delayed refund starts after expiry of 3 month from the date of receipt of application under Section 11B(1) of CE Act, 1944. Legislature never intended that refund application be kept pending for years together. Hence, postponement of passing of refund order under section 11B(2) ibid has nothing to do with interest liability of Revenue which starts running upon expiry of period of three months from date of application. Any contrary interpretation will violate language of Section 11BB of Central Excise Act, 1944 as made applicable to service tax vide Section 83 of Finance Act, 1994, defeat its object and extend premium for inefficiency and delay in processing claim for refund.

[Swadeshi Polytex Ltd. v. UOI – 2017 (51) str 354 (Allahabad)]

D. Interest liability

The appellants are undertaking the services of storage and warehousing of bulk liquid cargo and they engaged the services of their Associated Enterprises. Instead of making the payment of value of input services to their Associated Enterprises, the appellants make book adjustment in their books of account. A Show Cause Notice was issued to the appellant alleging that they have wrongly taken CENVAT credit for the reason that they have availed credit much before making payment of value of the input services to their Associated Enterprises and demand was raised. After due process of law, the original authority has dropped the demand but levied interest and penalty on the appellants alleging that there was a delay in making service tax payments to the Government by their Associated Enterprises. As such there was no delay in making the payment of service tax by the Associated Enterprises. The appellants have filed an appeal before the Tribunal. Held: The Associated Enterprises have paid the service tax within time without waiting for the payment to be made by the appellant and on such book adjustments the appellant has taken credit and the demand of interest is made on the pretext that there is delay in paying service tax and that appellant has taken credit of the service tax even before the payment of the said amount to the Associated Enterprises. When the service tax has been paid by the Associated Enterprises within time the demand of interest cannot sustain, in terms of provisions laid in Section 67(4)(c) of the Finance Act, 1994, the impugned order is set aside.

[IMC Ltd. v. CCE, Visakhapatnam-1 2017(51) STR 14(Tri.-Hyderabad)]


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