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Commissioner of Service Tax, Mumbai-II Versus Reliance Communication Ltd.

2015 (6) TMI 510 - CESTAT MUMBAI

Recovery of erroneous refund claim allowed earlier - Assessee provides telecom services sold recharge vouchers (RCV) to distributors at a discount to the printed MRP - since the value realised on sale of RCVs was less than the MRP, they claimed refund of excess service tax paid - Held that:- Revision proceedings initiated by the Commissioner must be completed by passing an order within two years from the date on which the order sought to be revised has been passed. In this case the order sought .....

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edure and time period within which Show Cause Notice must be issued for recovery of erroneous refunds.

Show cause notice as contemplated under section 11A of the Central Excise Act is required to be issued for recovery of erroneously refunded amounts within the time limit as provided in that Section from the relevant date and not through proceedings under section 35E. Although these decisions were rendered in the context of the Central Excise Act, the ratio will apply in the context .....

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ember (T),JJ. For the Appellant : Shri D Nagvenkar, Addl. Comm (AR) For the Respondent : Shri A Sheerazi & Abhishek Jaju, Advs. ORDER Per: P S Pruthi: This appeal filed by revenue is directed against the impugned Order in Original number 3/ST-II/SJS/2010 dated 10.5.2010 passed by Commissioner Service Tax Mumbai-11. 2. The respondents, Ms. Reliance Communications Ltd. while providing telecom services sold recharge vouchers (RCV) to distributors at a discount to the printed MRP (maximum retail .....

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Finance Act 1994, before its substitution on 19.08.2009 which reads as under: "Revision of Orders by the Commissioner of Central Excise 1) The Commissioner of Central Excise may call for the record of a proceeding under this Chapter in which an adjudication authority subordinate to him has passed any decision or order and may make such inquiry or cause such inquiry to be made and, subject to the provisions of this Chapter, pass such order thereon as he thinks fit. 2) No order which is preju .....

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order under this section shall be passed after the expiry of two years from the date on which the order sought to be revised has been passed." 2.1 As section 84(1) states that the Commissioner in review proceedings may pass such order subject to the provisions of this chapter, the Commissioner concluded that any order passed by him in the matter of recovery of service tax erroneously refunded would be subject to the provision of section 73 of the Finance Act 1994. And Section 73(1) require .....

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r held that the show cause notice dated 25.2.2010 issued for recovery in terms of Section 84 is beyond the prescribed period of limitation of one year and therefore no recovery can be effected under the show cause notice. 3. Heard both sides. 4. The learned AR appearing on behalf of Revenue reiterated the points set out in the appeal. The AR tried to draw a distinction between the erstwhile section 84 and the new section 84 introduced from 19.08.2009, and stated that in view of the explanation a .....

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subject to the provisions of this chapter' in clause (1) of section 84. 6. We have carefully gone through the facts and the submissions made by both sides. 6.1 We find that the grounds for initiating revision proceedings under section 84 were threefold, namely i) service is provided by the respondent to retail customers. Therefore the value for the purpose of charging service tax should be the value paid by the customers, that is the MRP. The difference between the MRP and the sale price is .....

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erefore the refund has resulted in unjust enrichment to the respondent iii) in terms of sections 73A, the service tax collected from any person should be deposited with the Central government. Therefore the sanctioning authority erred in holding that the respondent have neither charged nor collected the extra amount representing service tax from their distributors. 6.2 The ld AR contended that the erstwhile section 84 must be read with the substituted Section 84 effective from 19.08.2009. We fin .....

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. The Commissioner strikes at the very root of validity of the show cause notice issued under Section 84 by invoking Section 73(1). We note that Section 84 distinctly requires in clause (1), that the order to be passed by the Commissioner in terms of this Section must be 'subject to the provisions of this Chapter'. In our view, the word Chapter can only mean the chapter of the Act in which Section 84 occurs. All Sections of the Service Tax Law are comprised in Chapter V of the Finance Ac .....

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would be the date on which the refund order was passed by the sanctioning authority. 6.4 The learned AR argued that if such a view is taken it would render clause (5) of section 84 otiose. For the sake of convenience, we reproduce clause 5 below: "no order under this section shall be passed after the expiry of two years from the date on which the order sought to be revised has been passed". We find no contradiction between clause (1) and clause (5). The latter clause merely says that t .....

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on 73 has to be fulfilled. Section 73 (1) of the Finance Act is the provision in service tax law with regard to, inter alia, recovery of amounts erroneously refunded. The Section specifically lays down the procedure and time period within which Show Cause Notice must be issued for recovery of erroneous refunds. This position has been confirmed by the Larger Bench decision in the case of Best and Crompton Engg. Ltd. vs Commissioner C.EX. Chennai - 2000 (121) ELT 272 (Tri-LB). It was held in this .....

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