Commissioner Of Customs, Central ... vs Kusalava Finance Ltd

[Arising out of Order-In-Appeal No 21-09 dated 30/10/2009 passed by CCE&C(Appeals), Guntur]

For approval and signature:

HON'BLE Shri B.S.V.MURTHY, TECHNICAL MEMBER

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

Commissioner of Customs, Central Excise and Service Tax GUNTUR NULL P.B.NO. 331...C.R.BUILDING, KANNAVARI THOTA, GUNTUR, - 520004 ANDHRA PRADESH Appellant(s)

Versus

KUSALAVA FINANCE LTD D.NO. 40-1-10, MG ROAD, LABBIPET, VIJAYAWADA (AP) Respondent(s)

Appearance:

Dr. A.K. Nigam, Addl. Commissioner(AR) For the Appellant

Shri B. Seetharamaiah, Consultant For the Respondent

Date of Hearing: 30/01/2015

Date of Decision: 30/01/2015

CORAM:

HON'BLE Shri B.S.V.MURTHY, TECHNICAL MEMBER

Final Order No. 20373 / 2015

Per : B.S.V. MURTHY

The assessee is registered with Department for providing various financial services like hire purchase service, leasing service etc. under the category of banking and other financial service brought into service tax purview w.e.f. 16/07/2001. Proceedings were initiated against the appellant on the ground that they had not paid the entire amount of tax payable because they had not added certain charges collected by them. As a result of the proceedings, net service tax payable by them was worked out as Rs.12,59,368/- with interest and penalty was also imposed. Thereafter the matter reached the Tribunal and as per the Final Order No.1291/2007 dt. 12/11/2007 of this Tribunal, it was held that the services rendered by the assessee fall under hire purchase finance scheme and not hire purchase scheme and therefore assessee was not liable to pay service tax.

2. Thereafter assessee filed a refund claim for Rs.23,76,101/- being the service tax paid by them in respect of hire purchase finance scheme. It was observed that the refund claim filed by the assessee included the service tax paid by them from 16/07/2001 to 30/09/2005 and the refund claim was filed on 24/09/2008 and therefore the refund of service tax paid during the period from 16/07/2001 to 30/09/2005 was hit by limitation under Section 11B of Central Excise Act, 1944 made applicable to service tax matters. Therefore a show-cause notice was issued proposing to reject the refund claim to the tune of Rs.14,40,303/- being the amount not paid under protest / amounts in respect of which the time limit of one year was over. The balance amount was sanctioned.

3. On an appeal filed by the assessee, Commissioner(Appeals) held that the assessee was eligible for the refund since they had filed the refund claim within one year from the date of passing of the Tribunal order and the payment of service tax from 2001 onwards can be viewed as without any authority of law. Accordingly Commissioner(Appeals) held that rejection of refund on the ground of limitation is not sustainable. Revenue is in appeal against the impugned order allowing the refund.

4. I have considered the submissions made by both the sides. As can be seen from the facts of the case discussed briefly, in this case, proceedings were initiated by the Revenue on the ground that appellant was not paying service tax on the full value and were not including certain charges levied by them. The adjudicating authority confirmed the demand of service tax amounting to Rs.30,95,926/- out of which he appropriated the amount of Rs.18,36,558/- already paid by the assessee. From the proceedings initiated resulting in the OIO, it is seen that the Department had reopened the assessment for the entire period from 2001 onwards. Ultimately, the service itself was held not liable to tax at all. Having reopened the assessment in its entirety, demanding the entire amount of tax payable and appropriating whatever already has been paid, the net result is that the Departmental officers have reopened the entire assessment and therefore the refund claim filed by the assessee after the Final Order was passed by this Tribunal holding that no tax was liable to be paid, has to be considered as one arising as a result of the Tribunal order and therefore the time limit cannot be accounted from the date of payment of tax. Under the circumstances, it has to be held that claim of limitation by the Revenue cannot be accepted. Accordingly the appeal filed by the Revenue is rejected. Cross objections filed are also disposed of.

(Operative portion of this order pronounced in the court )

B.S.V.MURTHY TECHNICAL MEMBER

Raja.

4