East West Seeds India Pvt. Ltd. Vs Commissioner of C.E. & ST (CESTAT Mumbai)
CESTAT Mumbai held that as per rule 7B(1) of the Service Tax Rules, 1994, the claimant is required to submit a revised return. Accordingly, as the claimant failed to furnish the same refund is not admissible.
Facts- Appellant had entered into contract for trademark fees with its associated enterprise EWSILT for use of trademark wef. 01.01.2017. As on 30.06.2017, the appellant had made provision of Rs.2,28,27,342/- for the contract based on the initial communication from EWŞILT. Accordingly, the appellant paid the service tax @15% on Rs.2,28,27,342/- amounting to Rs.34,24,102/-. Subsequently the period of the agreement got revised to 01.04.2017 to 30.06.2017 and the amount of fee also was reduced to Rs.59,39,180/-. The service tax liability of the reduced fee amount was Rs.8,89,574/-, thus the service tax paid in excess amounting to Rs.25,34,528/- (Rs.34,24,102 – Rs.8,89,574) is claimed as refund.
On account of non-submission of documents, non-revision of ST-3 return, as well as other reasons, the claim of the refund was rejected. Commissioner (A) also rejected the same vide the impugned order. Being aggrieved, the present appeal is filed by the assessee.
Conclusion- Thus I do not find any merits in the submissions of the appellant to the effect that the refund application can be considered without revision of the return of the self assessment made by them while filing the ST-3 return. It is worth noting the provisions in Service tax law provide for the revision of the return by the assessee himself.
Admittedly no revised return as provided for in terms of Rule 7B of the Service Tax Rules, 1994 or under provisions of the Section 142 (9) of the CGST Act has been filed by the appellant. It is settled provision in law that the when the statute provides a manner of doing the thing, then the thing has to be done in the prescribed manner only and all other manner are necessarily barred. The authorities performing under the provisions of statute being creature of statute cannot relax the procedural requirements or the obligations cast by the statute.
I would only observe that the issue of unjust enrichment comes into picture only if the refund is otherwise found admissible. In the case under consideration if the refund is not found admissible, application of the principles of unjust enrichment need not be considered.
FULL TEXT OF THE CESTAT MUMBAI ORDER
This appeal is directed against the Order in Appeal No NSK-EXCUS-000-APPL-008-19-20 dated 11.04.2019 of the Commissioner of Goods & Service Tax and Central Excise (Appeals), Nasik. By the impugned order, Commissioner (Appeals) upheld the Order in Original No. R84/ST/RFD/AC/RURAL/18-19 dated 17.12.2018 passed by the Assistant Commissioner, Goods and Service Tax, Aurangabad Rural Division rejecting the refund claim for refund of service tax filed by the appellant under provisions of Sub-Section 9(b) of Section 142 of the CGST Act, 2017.
2.1 Appellant was having Service Tax registration no. AABCE1237FST001 for providing various services, and for payment of service tax on reverse charge mechanism, in respect of the services imported by them The appellant is paying trademark fee for usage of the trademark of its group company namely, East West Seed International Ltd, Thailand (EWSILT).
2.2 Appellant had entered into contract for trademark fees with its associated enterprise EWSILT for use of trademark wef. 01.01.2017. As on 30.06.2017, the appellant had made provision of Rs.2,28,27,342/- for the contract based on the initial communication from EWŞILT. Accordingly, the appellant paid the service tax @15% on Rs.2,28,27,342/- amounting to Rs.34,24,102/-. Subsequently the period of the agreement got revised to 01.04.2017 to 30.06.2017 and the amount of fee also was reduced to Rs.59,39,180/-. The service tax liability of the reduced fee amount was Rs.8,89,574/-, thus the service tax paid in excess amounting to Rs.25,34,528/- (Rs.34,24,102 – Rs.8,89,574) is claimed as refund.
2.3 On verification of the subject Refund Claim, it was observed that
> The claimant has not submitted any document on which basis the Invoice No. T-17/003 dated 31.05.2017 for USD $ 241000 and Invoice No. T-17/008 dated 30.06.2017 for $ 112000 has been issued by their associate unit viz. East West Seed International Ltd, Thailand.
> The claimant has not submitted any document evidencing that they were not using the trademark of their associated unit situated at Thailand prior to 01.06.2017.
> The claimant has submitted revised Invoice No. T-17/017 dated 20.10.2017 raised by their associate unit Viz. East West Seed International Ltd, Thailand which is not signed by the issuing person.
> The Claimant appears to be filed ST-3 return for the period 04.2017 to 30.06.2017 on 14.08.2017 wherein the claimant has shown value of ‘Intellectual Property Services other than copyright’ in the month of June, 2017 as Rs.2,28,27,342/-. The claimant themselves assessed the Service Tax liability and accordingly paid vide Challan No. 02701 dated 06.07.2017 amounting to Rs. 34,24,102/-.
> Sub-Rule (1) of Rule 7B of Service Tax Rules, 1994 which provides an assessee to submit a revised return, in Form ST-3, in triplicate, to correct a mistake or omission, within a period of [Forty Five days] from the date of submission of the return under rule 7. The claimant has appears to be not filed revised ST-3 return for the period April-June, 2017.
> As per Sub-Section 9(b) of Section 142 of the CGST Act, 2017 where any return, furnished under the existing law, is revised after the appointed day but within the time limit specified for such revision under the existing law and if, pursuant to such revision, any amount is found to be refundable or CENVAT credit is found to be admissible to any taxable person, the same shall be refunded to him in cash under the existing law, notwithstanding anything to the contrary contained in the said law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 and the amount rejected, if any, shall not be admissible as input tax credit under this Act.
> Since claimant has not filed the revised return within a period of 45 days from the date of original return filed, hence it appears that the refund is not admissible to the
> The amount of service tax paid by the claimant through TR-6 challan is based on their own self-assessment. The said amount has been deposited by them vide challan without any request or direction from the department. It appears that, this amount, which has been paid by the claimant, would get covered under the self-assessment and discharge of service tax liability by the claimant appears to be not refundable to the claimant.
2.4 Therefore, a Show Cause Notice bearing Sr. No. R09/ST/DC/RURAL/2018-19 dated 09.07.2018 asking them to show cause as to why, the refund claim of 25,34,574/- should not be rejected under Section 11B of Central Excise Act, 1944 for the reasons stated above
2.4 The show cause notice was adjudicated as per the order in original referred in para 1 above and the appeal filed by the appellant before Commissioner (Appeal) has been rejected as per the impugned order.
3.1 I have heard Shri Sachin Mishra, Advocate for the Appellant and Shri Sunil Kumar Katiyar, Assistant Commissioner, Authorized Representative for the revenue.
3.2 Arguing for the appellant learned counsel submits:-
> When the excess payment of service tax is not in dispute, the appellant is very much eligible for refund of excess service tax under section 11B of the central excise act, 1944
> Issue is squarely covered by decision of Hon’ble CESTAT in Piramal Enterprises Ltd. [2016 (42) STR 17 (T)]
> Without prejudice, the appellant is eligible for refund in cash under rule 6(3)/6(4a) of service tax rules, 1994 read with section 142(3) and 142(5) of CGST Act, 2017.
> Since, after 01.07.2017, neither credit can be taken nor adjustment can be done under Rule 6 (3)/ (4A) of Service Tax Rules, 1994, cash refund under Section 142(3) / 142(5) of CGST Act, 2017 should be granted to the Appellant
> Without prejudice to the above submission, the government cannot retain any amount, without any authority of law. Article 265 of the constitution of India, bars to collect any tax without any authority of law. The relevant extract is reproduced hereunder:
> “265. Taxes not to be imposed save by authority of law No tax shall be levied or collected except by authority of law.”
> The finding of the ld. Commissioner (appeals) that self-assessed tax is not refundable, is erroneous. The Appellant also rely upon the decision of Cadila Healthcare Limited v. CST Service Tax, 2021 (4) TMI 1157 CESTAT Ahmedabad in the context of Section 70 of the Finance Act, 1994.
> Without prejudice, the appellant could not have filed revised return for the period in dispute and therefore, non-filing of revised form st-3 return cannot be a ground to reject the refund under section 142(9)(b) of CGST Act, 2017
> Section 142(9)(b) of the CGST Act contains transnational provisions for refund of the tax paid under the existing law with the Ld. Commissioner (Appeals) has been wrongly In the present case, the Appellant has not filed the revised ST-3 and therefore Section 142(9)(b) of the CGST Act shall not apply. Additionally, the non-filing of such return is a procedural lapse and the refund cannot be denied on account of procedural lapses.
> In the present case, the credit note was issued by EWSIL on 31.08.2017 and the revised invoice on 20.10.2017 making the filing of ST-3 within the prescribed time limit Thus, non-filing of ST-3 is a procedural lapse, hence, refund cannot be denied on this ground.
3.3 Arguing for the revenue learned authorized representative submits:-
> This is basically a case of filing of refund application having been pre-maturely filed before the order of assessment (i.e. order of self assessment} being varied, therefore, the refund claim appears to be legally barred in as much as the assessment made by them was not varied on its merit by any authority.
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