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2016 (8) TMI 718 - CESTAT HYDERABAD

2016 (8) TMI 718 - CESTAT HYDERABAD - 2016 (43) S.T.R. 610 (Tri. - Hyd.) - Claim of refund of service tax on bad debts recovered - period of limitation - The period being prior to 15-03-2005 was governed by Notification No.21/2003-ST dated 20-11-2003 exempting the taxable services from the levy of service tax in respect of which payments were received in convertible foreign exchange. That the payment having received from Onconova, in convertible foreign exchange, the services provided by appella .....

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f CCE(Appeals) Bangalore Vs KVR Construction [2012 (7) TMI 22 - KARNATAKA HIGH COURT] has taken a similar view in a a similar set of facts. Following the proposition laid by the Hon'ble High Courts of Kerala and Karnataka, when there is no levy in accordance with the provisions of service tax law the claim for refund cannot be denied on the ground of limitation in terms of Section 11(B) of Central Excise Act. - Refund allowed. - Appeal No.ST/2690 & ST/2672/2012 - ORDER No. A/30169-30170/2016 - D .....

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3. The payment for the service was not received and the amount was written off in the books of account of the appellant. Subsequently, on 15-09-2006, the appellants received the amount of USD 30,000/- as consideration for services and this was recorded in their books as bad debts recovered @ ₹ 14,64,367/-. A service tax audit was conducted for the period February, 2007 to January, 2008 and the officers directed the appellants to pay service tax on the bad debts recovered from M/s Onconova. .....

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ayment having received from Onconova, in convertible foreign exchange, the services provided by appellant was not liable to service tax. The appellants then filed refund claim on 15-10-2009 in the prescribed Form-R for refund of the Service Tax amount erroneously paid by the appellants. A show cause notice dated 13-7-2010 was issued to them proposing to reject the refund claim on the ground that the claim being time barred. The appellants defended the show cause notice contending that the subjec .....

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eals) challenging the rejection of refund claim. 3. Meanwhile, investigations were initiated by DGCEI, alleging that appellant was indulging in evasion of service tax, alleging that appellant failed to pay service tax on the amount of FCIR of USD 30,000/-(Rs.14,64,368/-) received form Onconova Inc. USA and accounted in their books as recovery of bad debts. During the investigation itself, the appellants had paid service tax of ₹ 1,61,086/- and interest amount of ₹ 20,999/-, which is .....

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services exported to Onconova during the relevant period were not taxable services, and that the service tax was neither charged nor collected from Onconova Inc. USA. After adjudication, the original authority confirmed the demand of service tax and interest and imposed equal amount of penalty u/s 78 with an option of reducing penalty of 25% if paid within 30 days from the date of communication of order. The Original authority did not impose penalty u/s 76 of Finance Act. The appellants filed a .....

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tion received from Onconova Therapeutics Inc. USA for the services rendered by appellants to them. It is the case of appellant that they had provided services to M/s Onconova Inc. USA, an overseas company in the year 2002 -2003. They did not receive the payment at that time and the amount was written off in their books of accounts. Later the payment was received in FCIR in the year 2006 and the same was disclosed in their accounts as bad debts recovered .The Notification No.6/99-ST dated 09-04 .....

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003. There was doubt whether services for which consideration was received in FCIR during the intervening period between 01-03-2003 and 20-11-2003 would be exigible to Service tax. The CBEC by Circular No. 56/5/2003- ST dated 25-04-2003 has clarified that service tax is destination based consumption tax and it is not applicable on export of services. Export of services would continue to remain tax free even after withdrawal of Notification 6/1999 dated 09-04-1999. This clarification issued by th .....

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ween 01-07-2003 to 19-11-2003. The Tribunal observed that there can be no demand of service tax on the ground that exemption notification No.6/99-ST was withdrawn in March, 2003 and identical exemption was reintroduced only in November, 2003. That CBEC has held export of services to be tax free notwithstanding the Notifications. In the case in hand, there is no dispute the service were exported and also that amount was received in convertible foreign exchange. The CBEC circular dated 25-04-2003 .....

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xt issue to be addressed is the claim of refund made by appellants in appeal No.2690/2012. The appellants deposited the service tax of ₹ 1,61,086/- along with interest of ₹ 20,999/- on 28-02-2008 on the consideration received from M/s Onconova Inc. USA The appellants have filed the refund claim contending that no service tax is payable by them for the export of services made during the period 2002-2003. The refund claim was rejected on the ground of being time bar in terms of sec. 11 .....

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paid by them is not service tax. It was only an amount deposited erroneously under pressure from the department. To fortify his arguements the learned counsel relied upon the judgment laid by Honble High Court of Kerala in M/s Geojit BNP Paribas Financial Services Ltd. Vs CCE CST Kochi 2015-VIL-279-KER-ST. The Hon'ble Court observed as under: The learned counsel for the department, relying on the judgment of the Hon'ble Supreme Court in Mafatlal Industries Ltd. And others Vs. Union of .....

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stoms Act. None of the above categories would attract to the case in hand. In this case, the levy was purely on account of mistake of fact in understanding the law. The petitioner assumed that the transaction, for which he has paid tax, is covered under the law. The law does not cover such transaction for payment of service tax. Therefore, it is not on account of any mistake of law but mistake on fact the service tax was paid. In that view of the matter it has no colour of tax for the purpose of .....

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