GTL INFRASTRUCTURE LTD. Vs. COMMISSIONER OF SERVICE TAX
LAWS(CE)-2015-1-69
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on January 05,2015

Gtl Infrastructure Ltd. Appellant
VERSUS
COMMISSIONER OF SERVICE TAX Respondents


Referred Judgements :-

BDH INDUSTRIES LTD. V. CCE [REFERRED TO]
ARVIND ENTERPRISES V. CC [REFERRED TO]
AUTOMOTIVE METAL STAMPINGS PVT. LTD. V. CCE [REFERRED TO]
COMMISSIONER OF CENTRAL EXCISE VS. CEAT LTD [REFERRED TO]
VIGHNAHAR SSK LTD. VS. COMMISSIONER OF CENTRAL EXCISE, PUNE [REFERRED TO]


JUDGEMENT

Ashok Jindal, Member (J) - (1.)THIS appeal is taken up for consideration as per the directions of the Hon'ble Bombay High Court vide order No. 29.09.2014 which is reproduced here -in -under: - -
contd.

(2.)BRIEF facts of the case are that the appellant is a registered Company under the category of Business Auxiliary Services with the department to pay service tax on their activity of providing infrastructural facilities to various telecom companies. Chennai Network Infrastructure Ltd. (NIL), having a registered office at Navi Mumbai and is engaged in providing similar services. Both the appellant and CNIL sought merger in the name of GTL Infrastructure Ltd. Consequently, they filed petitions before the respective High Courts (Mumbai and Madras) seeking sanction of scheme of merger with the appellant. The Hon'ble Bombay High Court sanctioned the scheme of merger of CNIL with the appellant on 22.07.2011 whereas the petition filed before the Hon'ble Madras High Court is still pending for consideration of sanction of scheme of merger. As the Hon'ble Bombay High Court sanctioned the scheme of merger, therefore the appellant filed a consolidated service tax returns declaring the revenues of both the appellant and CNIL altogether. CNIL did not file returns for its revenues for its activities during the impugned period. Consequent to that the appellant paid the liabilities of CNIL towards service tax amounting to Rs. 79,92,56,619/ - by debit entry in the appellant's CENVAT account for the period October 2010 to March 2012. Some part of the service tax liability was paid by utilizing CENVAT credit lying in the account of CNIL. As the appellant got sanction of scheme of merger by the Hon'ble High Court of Bombay, presumed that the appellant and CNIL have merged. But the approval for scheme of merger was pending before the Hon'ble Madras High Court, therefore the appellant are not required to include taxable service of M/s. CNIL in their turnover and were not required to pay service tax there on this realization, CNIL filed a declaration under Voluntary Compliance Encouragement Scheme (VCES) disclosing its service tax liability to the tune of Rs. 79,92,56,919/ - and discharged the same on 22.11.2013. The designated authority issued a Discharge certificate to CNIL under VCES scheme for the above said liability. CNIL informed the appellant that all service tax liability has been paid by them and they have no objection in the appellant taking credit of service tax paid on behalf of CNIL. Out of abundant caution, the appellant approached the Hon'ble Bombay High Court in a Writ Petition to seek approval of the Hon'ble High Court to re -credit the amount of service tax paid on behalf of CNIL, the Hon'ble Bombay High Court vide order dated 27.01.2014 directed the learned Commissioner to decide the matter by considering the said Writ Petition as a representation before the Commissioner. On 7.3.2014, the learned Commissioner directed the appellant to approach the proper officer for pursuing the remedy. The appellant has challenged the order of the learned Commissioner before this Tribunal and this Tribunal has dismissed the appeal of the appellant against the impugned order holding that the same is not maintainable. The said order of this Tribunal was challenged before the Hon'ble Bombay High Court and the Hon'ble Bombay High Court held that the Hon'ble Tribunal is competent to decide the appeal and should do so in accordance with law. Therefore, this appeal is before us.
Heard both sides.

(3.)THE learned Counsel for the appellant submits that the learned Commissioner himself was competent to decide the issue as per Section 12E of the Central Excise Acts, 1944 read with Section 83 of the Finance Act, 1994 and he was also duty bound to honour the direction of the Hon'ble High Court vide its order dated 27.01.2014. He further submits that the amount in dispute as claimed by the appellant as CENVAT credit has already been paid by CNIL admitting it to be its service tax liability. This fact has been confirmed by the order of competent authority by adjusting the same in VCES scheme. As the CNIL obtained the discharge certificate of service tax liability therefore, the appellant is entitled to take CENVAT credit of the amount of service tax paid on behalf of CNIL by the appellant as CNIL and the appellant has not got the sanction of scheme of merger by the Hon'ble Madras High Court till yet. It is also submitted that the appellant has filed the service tax returns showing the turn over of CNIL with their turn over and discharge of service tax liability of themselves as well as on behalf of CNIL on the premise that after merger the appellant is required to pay service tax liability of both. The payment of service tax has been accepted by the Revenue. As the said amount was not required to be paid by the appellant and CNIL has paid their liability along with interest and discharge certificate has been obtained by CNIL, therefore, the appellant is entitled to re -credit the said amount paid earlier by debiting their CENVAT credit account on behalf of CNIL. In other words, it is submitted that the Revenue cannot be permitted to retain the service tax on the same taxable service from two different persons therefore, the service tax paid by the appellant on the taxable activities of CNIL ought to be allowed as credit to the appellant when the same liability has been accepted as due from CNIL and has indeed been recovered from them. By not allowing the appellant to take CENVAT credit from the appellant's CENVAT account for liability of CNIL discharged by the appellant, the revenue is unjustly enriching itself by recovering the amount twice.
4.1 The appellant relied on the judgement of Hon'ble Bombay High Court in the case of CCE v. CEAT Ltd. : 2013 (298) ELT 525 (Bom) to say that the Hon'ble High Court of Bombay approved that the assessee taking suo motu credit of additional excise duty after having paid the same to the Revenue through PLA. He also relied upon the decision of this Tribunal in the case of Vodafone Essar Digilink Ltd., 2011 (31) STR 751 (Tri. Del) wherein this Tribunal approved suo motu claiming of credit by the assessee after payment of equal amount in cash. The learned Counsel prayed that applying the ratio of the above decisions to the present case, it is evident that CNIL has discharged its service tax liability in cash under the VCES scheme, therefore the appellant is entitled to take re -credit of the service tax paid on behalf of CNIL.

4.2 He further submitted that as per the provisions of Rule 6 (4A) of Service Tax Rules, 1994 where an assessee has paid to the credit of the Central Government any amount in excess of the amount required to be paid towards service tax liability, the assessee may adjust such excess amount paid by him against his service tax liability for the succeeding month. In the present case, it is an admitted that the appellant has paid service tax in excess of its own liability, therefore by applying the provisions of Rule 6(4A) of Service Tax Rules, 1994 the appellant will be well within their rights to claim credit of such amount.

4.3 He further submitted that when the department has accepted the duty liability discharged by CNIL, therefore the amount paid by the appellant ceases to be in the nature of service tax and is merely an excess deposit by the appellant. Therefore, the said amount is refundable to the appellant without applying the provisions of Section 11B of the Central Excise Rules, 1944. In this regard the appellant relied upon the decision of the Hon'ble Delhi High Court in the case of Hind Agro Industries Ltd. : 2008 (221) ELT 336 (Del.).

4.4 Without prejudice to the above consideration, it is submitted that the cause of action for the appellant to claim re -credit of the cenvat amount paid by them has arisen only on 22.11.2013 i.e. the date on which the revenue accepted the duty liability discharged by CNIL by accepting CNIL's VCES declaration. To support this contention the learned Counsel relied on the decision in the case of Arvind Enterprises v. CC, 2009 (245) ELT 570 wherein it was held that the date from which the limitation can be computed is the date on which the Revenue finally adjusted assessee's duty liability. In the present case the said date is 22.11.2013 i.e. the date of acceptance of VCES declaration of CNIL. Therefore, it is submitted that the claim filed by the appellant is within time.

4.5 In these circumstances, it is prayed that the appellant be allowed to re -credit the service tax paid by the appellant during the impugned period on behalf of CNIL which was not required to be paid by the appellant.

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