Ambiguity in Second Appeal Jurisdiction: CESTAT Dismisses Precautionary Appeal

Amadeus Software Labs India Pvt Ltd Vs Commissioner of Central Tax (CESTAT Bangalore)

Introduction: In an intriguing case that unfolded between Amadeus Software Labs India Pvt Ltd and the Commissioner of Central Tax, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Bangalore was presented with the question of jurisdiction for a second appeal. This stemmed from the ambiguity over the correct appellate authority for matters relating to the rebate of service tax on input services.

Analysis: Amadeus Software Labs, engaged in exporting software development services, was claiming refund of unutilized cenvat credit of service tax paid on input services. The applications filed by the company for the rebate of Swachh Bharath Cess were rejected, leading to appeals before the Commissioner (Appeals) and subsequently, before the CESTAT.

However, the company’s interpretation of Section 86(1) of the Finance Act, 1994 suggested that the appropriate appellate authority should be the Central Government (Revisional Authority). This led to the filing of a revision application with the Revisional Authority, resulting in an apparent ambiguity regarding the correct jurisdiction for the second appeal. Consequently, the company requested the withdrawal of the appeals filed before the CESTAT as a precautionary measure, a request which was granted.

FULL TEXT OF THE CESTAT BANGALORE ORDER

These appeals are filed against the Order-in-Appeal Nos.107-112/2021 dated 11.03.2021 passed by Commissioner Central Tax (Appeals-I) Bangalore.

2. Briefly stated the facts of the case are that the appellant, Amadeus Software Lab, is engaged in the export of software Development services to its parent company located in France, which is classifiable under Information Technology Software Services (ITS Services). The appellant has been regularly claiming refund of unutilized cenvat credit of service tax paid on input services received and entirely used in the export of ITS Services under Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No. 27/2012-CE (NT) dated 18.06.2012.

3. The company has also filed separate applications in Form ASTR-2 for claiming rebate of tax paid as Swachh Bharath Cess (SBC) on input services received and used in providing services exported outside India under Notification No. 39/2012-ST dated 20.06.2012 as amended by Notification No. 03/2016-ST dated 03.02.2016 for the relevant period. The details are as under:

4. The above applications filed were rejected by Assistant Commissioner vide separate orders, wherein the claim of rebate of tax was rejected on the ground that since refund includes rebate of duty, the rebate claims have to be filed within a period of one year as per under Section 11B of Central Excise Act, 1944 read with Section 83 of Finance Act, 1994. The appeals preferred against the Orders-in-Original were rejected by the Commissioner (Appeals). Consequently, the appellant filed the above 6(six) appeals before this Tribunal.

5. Appellants were heard on 03.04.2023 wherein the learned CA sought two weeks time to submit a synopsis and the learned AR sought one week time to respond which was allowed by this Thereafter, the applicant has submitted a letter dated 17.04.2023 and has requested for withdrawal of the appeals on the grounds that they have also filed an appeal before the Revisional Authority and the order of the Revisional authority was received by them on 04.04.2023, wherein their appeals were rejected. As regards filing of appeals before this Tribunal and the Revisional authority appellant has stated that as per the provisions of first proviso to Section 86(1) of Finance Act, 1994 which reads as under:

“Provided that where an order, relating to a service which is exported, has been passed under Section 85 and the matter relates to grant of rebate of service tax on input services, or rebate of duty paid on inputs, used in providing such service, such order shall be dealt with in accordance with the provisions of Section 35EE of the Central Excise Act, 1944 (1 of 1944).”

And that from the bare reading of the above provision, it appeared that the appeal in respect of the orders passed by the FAA shall lie before the Central Government (Revisional Authority) in the form of a revision application and not before the Hon’ble Appellate Tribunal. However, appellant stated that they have noted the Tribunal’s order in the case of AXA Business Services Private Limited Vs. Commissioner of Central Tax, Bangalore North [2019 (7) TMI 398-CESTAT Bangalore] wherein similar issue on rebate of Swachh Bharat Cess has been decided in favour of the assessee vide their Final Order No. 20520-20522/2019 dated 03.07.2019. In view of the above, the appellant states that there is ambiguity as to whether the order passed by the Commissioner (Appeals) is appealable to this Tribunal or to the Central Government (Revisional Authority).

6. The appellant submitted that the revision applications were filed subsequent to the filing of the above 6(six) appeals before this Tribunal as a precautionary measure owing to the ambiguity regarding correct jurisdiction for the second appeal in the matter. The appellant has prayed to condone the filing of second appeal before two different appellate forums and to allow them to withdraw the above appeals filed before this Tribunal.

7. In view of the above facts and circumstances of the case, the request of the appellant for the withdrawal of the appeals is allowed and the 6 (six) appeals filed are dismissed as withdrawn.

(Order pronounced in open court on 05/06/2023)