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Corporate News *  Service tax penalty can’t survive when assessee acted on dept.’s own view of non-taxability: Delhi High Court. *  GST section 74 extended limitation questionable when form 26AS mismatch was already known: Karnataka High Court grants interim relief. *  CGST demand prima facie impermissible after state GST settlement under section 128A: Bombay High Court. *  Supreme Court asks GSTAT to sympathetically consider delay as taxpayers pursued remedy before wrong forum. *  Supreme Court stays Tripura High Court ruling protecting genuine buyers from ITC denial over supplier’s GST default. *  Diary entries alone can’t prove clandestine removal of goods: CESTAT quashes excise penalty on steel trader. *  Customs could investigate preferential tariff claims even before sec. 28DA: Delhi High Court. *  Customs dept. relied on fake AI generated case laws: supreme court quashes Rs. 425.28 crore penalty. *  No GST exemption in affiliation and annual registration charges for admission or conduct Of examinations: GSTAT. *  Mere invoices, cheque payments insufficient to establish genuine movement of goods: GSTAT restores Rs. 43.44 lakh ITC demand. *  Consolidated GST show cause notice covering multiple financial years is not without jurisdiction: Delhi High Court. *  Construction of independent houses on separate plots not taxable as ‘Residential Complex’ without common facilities: CESTAT. *  GST penalty exceeding statutory maximum unsustainable; Allahabad High Court quashes ? 50,000/- penalty after taxpayer filed return and paid late fee. *  GST order against standard chartered bank passed without hearing set aside by Bombay High Court. *  Retracted statements can’t be relied upon without cross-examination: CESTAT quashes gold confiscation. *  Burden to prove misclassification lies on customs department: CESTAT. *  CESTAT quashes Rs. 98 lakh excise demand on clearance of used refractory brick scrap. *  Service tax demand on irrigation works quashed: Karnataka High Court rules sale of goods component not taxable as service. *  GSTAT restores tax and penalty for transporting iron scrap without E-way bill citing intent to evade tax. *  Madras High Court stays GST recovery from directors without opportunity to show cause under section 89. *  Madras high court stays GST recovery notice against directors; finds prima facie case on applicability of section 79(1)(c). *  Procedural lapses can’t justify harsh punishment without serious customs breach: CESTAT quashes customs broker licence revocation. *  Service tax payable on land leasing and sports complex charges: CESTAT. *  Settled customs dispute can’t be reopened through Article 226 challenge to interest liability: Delhi High Court. *  Mere facilitation of customs clearance can’t establish knowledge of smuggling: Madras High Court. *  GST registration cancellation stayed: Allahabad High Court questions 99% ITC utilisation cap under rule 86B. *  Composition scheme lapses automatically on crossing Rs. 1.5 crore turnover: GSTAT. *  Gujarat High Court quashes GST cancellation orders after officer relied on non-existent AI-generated case laws. *  Importers liable for customs duty benefits availed through manipulated scrips: Delhi High Court. *  Procedural E-way bill lapse alone can’t justify penalty where genuine transaction and absence of tax evasion are established: GSTAT.
Subject News *  Documentary evidence dominates probe, further custody unwarranted: mumbai court grants bail in Rs. 22.44 crore customs duty evasion case. *  Business premises can’t remain sealed for non-participation in GST search: Allahabad High Court. *  GST pre-deposit must be refunded proportionately when taxpayer partly succeeds in appeal: Bombay High Court. *  Supreme Court grants 30 days to file GST appeal; keeps pre-deposit issue open due to deposit in parallel CGST proceedings. *  GST demand can’t exceed amount proposed in SCN: Allahabad High Court quashes Rs. 20.47 Crore order. *  Hundreds-of-crores GST demand and heavy 10% pre-deposit no ground to bypass statutory appeal: Punjab & Haryana High Court. *  Delhi High Court refuses to entertain challenge to gold confiscation due to statutory appeal remedy and unexplained delay. *  Procedural error in customs broker licence inquiry can be rectified through remand: Delhi High Court. *  GSTR-2A mismatch alone can’t justify ITC denial without invoice-wise verification; personal hearing mandatory: GSTAT. *  GST order passed without uploading personal hearing notices violates sec. 75(4): Allahabad High Court. *  TAX EVASION - Sec. 74 GST SCN quashed for not spelling out fraud, wilful misstatement or suppression: Allahabad High Court. *  STPI’s SOFTEX certification and NoC charges taxable as business support services: CESTAT. *  Suspicion can’t replace proof: CESTAT quashes penalty in alleged gold-smuggling operation. *   Limitation runs from communication of order: Madras High Court upholds rejection of delayed GST Appeals. *  Rajasthan High Court quashes GST demand over unsigned show cause notice. *  ITC recovery upheld where supplier failed to deposit GST: Rajasthan High Court. *  Customs commissioner’s empowered to make port trust liable for duty on pilfered goods: Supreme Court. *  Rectification proceedings can’t be used to challenge an uncontested GST assessment through a writ petition: Andhra Pradesh HC. *  GST proceedings against deceased proprietor unsustainable without notice to legal heir: GSTAT. *  Mere availment of ineligible self-assessed ITC doesn’t amount to suppression without evidence of fraud or wilful misstatement: GSTAT. *  Disposal of mining overburden by entity authorised by mining lease holder constitutes taxable service: CESTAT. *  Toll plaza data not mandatory for ITC refund: GSTAT. *  Disputed GST fraud allegations require investigation: Punjab and Haryana High Court makes interim bail absolute in alleged fraud and GST fraud case. *  Non-manufacturer contractor liable to deposit excess excise duty collected from buyer: CESTAT. *  GST order can’t reject taxpayer’s reply as “not satisfactory” without reasons: Madhya Pradesh High Court. *  Uncorroborated statements can’t establish alleged diversion of duty-free goods: CESTAT. *  Erection services were not liable to service tax prior to 10th september 2004: CESTAT. *  Sec. 74 GST notice must spell out statutory ingredients for invoking extended tax demand proceedings: Allahabad High Court. *  No jurisdictional bar under section 6(2)(b) in parallel CGST SGST proceedings: Delhi High Court refuses to bypass GST appeal remedy. *  Madras High Court remits GST demand for fresh adjudication after taxpayer claims it was unaware of SCN following business closure.  

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PJ/Case Laws/2012-13/1292

- Whether refund of unutilized credit of ST admissible to SEZ where such services were unconditionally exempted?
 
 
Case:-   GLOBAL ADVERTISEMENT SERVICES PVT. LTD VS COMMISSIONER OF CENTRAL EXCISE, PUNE-III

Citation: -2012-TIOL-1478-CESTAT-MUM

Brief facts: - The Appellant, M/s Global Advertisement Services Pvt. Ltd., is a unit in the Special Economic Zone and is registered with the Pune-III Commissionerate as a service provider under the category of "Business Auxiliary Services". They exported taxable output service under the Export of Service Rules, 2005 without payment of service tax. This resulted in accumulation of unutilized credit of service tax availed on input service for which they filed a refund claim for Rs.5,63.332/-  for the period October to December, 2010 in terms of Rule 5 of the CENVAT Credit Rules, 2004 read with Notification no. 5/2006-CE(N.T) dated 14.03.2006, further read with Section 11B of the Act. The lower adjudicating authority held that the appellant had procured input service from the Domestic Tariff Area and such services are exempted unconditionally vide Notification no. 9/2009-ST dated 03.03.2009 and, therefore, the appellant should not have paid any duty. Seeking refund of input service tax credit for the activities undertaken within the SEZs is not consistent with the scheme of refund under rule 5 of the CENVAT Credit Rules, 2004 and accordingly, the refund claim is rejected.
 
The Appellant preferred an appeal before the lower appellate authority who held that the appellant being a SEZ unit cannot claim refund under rule 5 of the CENVAT Credit Rules, 2004. The SEZ unit is under the administrative control of the Development Commissioner and, therefore, CENVAT Credit Rules and the notification issued there under are not applicable to the appellant and they are not eligible for the refund. Accordingly, he dismissed their appeal.
 
 Aggrieved by the order of lower adjudicating authority the appellant is before Tribunal.
 
Appellant Contentions: - The Learned counsel for the appellant submits that nowhere in Rule 5 of the CENVAT Credit Rules it is stated that a unit in the SEZ cannot apply for refund under the provisions of the said Rules. Similarly, Notification 5/2006-CE(N.T) dated 14.03.2006 also does not debar unit in the SEZ from filing a refund claim as per the procedure prescribed under the said notification. He also relies on the Board's Circular no. 105/8/2008 dated 16.09.2008 wherein the Board has clarified that respective jurisdictional authorities administering service tax should deal with the refund claims filed by the units in SEZ. He also relies on the judgment of the Hon’ble apex court in the case of HCL Ltd. vs. Collector of Customs, New Delhi 2001(130)ELT 405(SC) = (2002-TIOL-847-SC-CUS-LB) and Unichem Laboratories Ltd. vs. Collector of Central Excise, Bombay 2002(145)ELT 502 (SC). = (2002-7101.-237-SC-CX) wherein it has been held that when there are two exemptions available, the assessee is entitled to the benefit of that exemption notification which gives him greater relief regardless of the fact that the notification in general terms and the other notification is more specific to the goods.
 
 
Respondent Contentions:-   The learned Dy. Commissioner (AR) appearing for the Revenue reiterates the findings of the lower authorities that appellant was not required to pay duty because of exemption notification in force and that the appellant was a SEZ that cannot file refund claim under Rule 5 of the Cenvat Credit Rules, 2004.
Reasoning of Judgment:  The Tribunal held that there is no dispute about the fact that the appellant has received duty-paid input service and such input service have been utilized in rendering the output service which has been exported. Further, the appellant is also registered with the service tax authorities under the category of 'Business Auxiliary Service'. As clarified by the Board in the Circular no. 105/8/2008 dated 16.09.2008 it is for the jurisdictional Excise/Service Tax authorities to deal with the refund claims filed by the SEZ units. Therefore, it is very clear that the appellant is eligible for refund of service tax paid which was not required to be paid under section 11B of the Act itself, provided that the appellant has filed the refund claim within the prescribed time-limit and the bar of unjust enrichment does not apply. In the instant case, as the appellant has exported the output service, hence, the principle of unjust enrichment does not apply. Therefore, the only point that needs to be seen is whether the appellant has made the refund claim within a period of one year from the date of payment of duty and in respect of such duties, he would be rightly entitled for the benefit of refund under section 11B of the Act itself. In view of the above position, Tribunal set aside the impugned order and remand the case back to the original adjudicating authority to examine the claim of the appellant with respect to the time-limit involved and if the refund claim is in time, to sanction the refund in accordance with law.
 
Decision:- Matter remanded for verifying whether the refund claim was filed in time.
 
Comment: This case also lays the foundation that where service tax was paid irrespective of the fact whether the same was not required to be paid, the assessee can file the refund claim in that respect when it is clear that bar of unjust enrichment is not applicable. The department cannot compel the assessee to take benefit of a particular notification as when there are 2 notifications that are beneficial to the assessee, it is at the sole discretion of the assessee to opt for any one of them, which is most beneficial to the assessee.
 
 
 
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