M/S Paras Pharmaceuticals Ltd vs Commissioner Of Central Excise
- CitationAppeal No. : ST/25/2008
Ratio decidendi
The rule this decision rests on
Where the department has collected service tax on a service rendered outside India before the statutory liability arose, the amount is recoverable as a refund, because the issue is settled by the Supreme Court's affirmance of the Bombay High Court in Indian National Shipowners Association: service tax liability on taxable services provided by a non-resident or person located outside India to a recipient in India arises only from the date of enactment of Section 66A of the Finance Act, 1994, namely 18.4.2006, so a payment made earlier on such services is an erroneous payment that the assessee is entitled to claim back, and an adjudicating authority that rejects such a refund claim on that ground cannot sustain the rejection.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
[ Arising out of OIA-133/2007/AHD-III/CE/ID/COMMR-A dtd 12.12.2007 passed by Commissioner of Central Excise-AHMEDABAD-III ]
M/s Paras Pharmaceuticals Ltd - Appellant(s)
Vs
Commissioner of Central Excise- AHMEDABAD-III - Respondent (s)
Represented by For Assessee : Shri Jigar Shah, Advocate For Revenue : Shri Alok Srivastava, Authorised Representative
For approval and signature :
Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Honble Member (Technical)
1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No 3 Whether their Lordships wish to see the fair copy of the Order?
Seen 4 Whether Order is to be circulated to the Departmental authorities?
Yes
CORAM :
Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Honble Member (Technical)
Date of Hearing / Decision : 14/7/2015
ORDER No. A/11165 / 2015 dtsd 14/7/2015
Per : Mr.P.K. Das,
The appellant was engaged in the manufacture of Medicaments classifiable under Chapter 30 of the Central Excise Tariff Act 1985. They paid the amount as commission towards Sales (Exports) promotion of their product to foreign agents by foreign currency, during the period from 1.4.2004 31.3.2005 and 1.4.2005 31.12.2005. At the instance of Central Excise Officers, they have paid service tax an amount of Rs 9,48,066/- on 4.2.2006. They filed refund claim of Rs 9,48,066/- on 26.4.2006 on the ground that the said amount was paid erroneously by them. The appellant contended before the lower authorities that the services rendered outside India are not liable to Service Tax prior to 16.6.2005. The adjudicating authority rejected the refund claim, which was upheld by the Commissioner (Appeals).
2. After hearing both sides and on perusal of the records, we find that the issue is no more res integra in view of the decision of the Honble Bombay High Court in the case of Indian National Shipowners Association vs. Union of India [2009(13)STR.235(Bom.)], which was upheld by the Honble Supreme Court as reported in 2010(17)STR.J57(SC). The CBEC vide Circular No 276/8/2009-CX.8A dtd 26.9.2011 clarified that in view of the decision of the Honble Supreme Court the Service Tax liability on any taxable service provided by non-resident or a person located outside India, to a recipient in India, would arise with effect from 18.4.2006 i.e., the date of enactment of Section 66A of the Finance Act, 1994.
3. In view of the above legal position, the rejection of refund claim cannot be sustained on merit. Accordingly, the impugned orders are set aside. The Adjudicating Authority is directed to grant the refund subject to verification of records in accordance with the law. The appeal filed by the appellant is allowed.
(Dictated and pronounced in the Court)
(P.M. Saleem) (P.K. Das) Member (Technical) Member (Judicial)
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