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2017 (1) TMI 549 - CESTAT NEW DELHI

2017 (1) TMI 549 - CESTAT NEW DELHI - TMI - Refund claim - reduction in transportation charges - reverse charge mechanism - unjust enrichment - Time limitation - section 11 B of the Central Excise Act, 1944 - denial on the ground that the appellant, being the service recipient, has no locus standi to claim a refund as it has not paid service tax in the Government Account - Held that: - The applicability of Section 11B ibid for claiming refund of Central Excise duty/Service Tax is not restricted .....

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ion over service recipient - the appellant in the capacity of recipient of service, can file refund application before the authorities having jurisdiction over the service recipient or before the jurisdictional authorities of the service provider under Section 11B ibid. - The excess paid service tax has been borne by the appellant and its incidence has not been passed on to any other person. Therefore, the legal presumption contained in Section 11B ibid has been rebutted in this case and the .....

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, leading to this appeal, are as under 1.1 The appellant is engaged inter alia,in the manufacture of fertilizers and is registered with both the Central Excise and Service Tax Department. The appellant receives services of transportation of natural gas through pipeline. The transportation charges of natural gas are regulated by the Central Government through the Petroleum and Natural Gas Regulatory Board of India (for short, 'PNGRB'), in terms of the PNGRB (Determination of Natural Gas P .....

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of the charges by PNGRB, GAIL issued two nos. of credit notes for ₹ 17,62,85,114/- and ₹ 2,10,30,106/- respectively, both dated 20.09.2010, to the appellant towards the reduction in the transportation charges for the relevant period. However, the amount of service tax on such differential amount was not refunded by GAIL to the appellant. 1.2 In this background, the appellant, being the service recipient and borne the incidence of service tax, had filed the refund application for S .....

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al Excise, Jaipur vide the impugned order dated 05.09.2012 has upheld rejection of the refund claim. Feeling aggrieved with the impugned order, the appellant has filed appeal before this Tribunal, which was listed as Appeal No. ST/3853/2002. 1.3 In respect of the same refund amount, the appellant filed another application on 24.02.2011 before the Assistant Commissioner of Service Tax, Gwalior i.e. the jurisdictional authority for GAIL. The said claim was denied by the Assistant Commissioner vide .....

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enrichment; that the appellant has not produced any evidence to show payment of alleged service tax by GAIL in the Government Account; that the reduction in transportation charges is a matter between GAIL and the appellant and the same has no relation with reduction of service tax liability. Against the impugned order dated 27.03.2012, the appellant has preferred appeal before this Tribunal, which was listed as Appeal No. ST/1805/2012. 2. Shri B.L Narshiman, the ld. Advocate appearing for the ap .....

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e disputed service tax amount has been paid by GAIL and recovered from the appellant, the fact of which has also been accepted by the Department in the SCN dated 03.03.2011. With regard to filing of refund application before wrong jurisdictional service tax authorities, the ld. Advocate submitted that the appellant being a recipient of service and having borne the service tax liability, had the option either to file the refund application before the Commissionerate under whose jurisdiction it pu .....

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, since GAIL has issued the credit note on 20.09.2010, the date of issuance of such credit notes should be construed as the date of computation of the limitation period inasmuch as finalization of the transportation charges and actual liability on that count was known on the said date. Since the refund application was filed on 17.01.2011, which is within the stipulated time of one year from the date of such finalization, the same is within the time limit prescribed under Section 11 B ibid. To su .....

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borne by it. In this context, the ld. Advocate has relied on the judgment of Hon'ble Madras High Court, in the case of Commissioner - Vs. - Virudhnagar Textile Mills Ltd., repored in 2008 (230) ELT 411 (Mad.) and also the decision of this Tribunal in the case of Commissioner - Vs. - Sankar Printing Mills, 2015 (321) ELT 295 (Tri.-Del.) and Eveready Industries India - Vs. - Commissioner, 2015 (323) ELT 612 (Tri.-Del.). 3. On the other hand, Shri Govind Dixit, the ld. A.R. appearing for the R .....

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ject to the conditions that the tax/duty was collected from or paid by him; and the incidence of such tax/duty had not been passed on by him to any other person. Thus, in absence on any stipulation contained in the statutory provisions, the service recipient is well entitled to claim refund of service tax paid by him to the service provider. With regard to the issue, as to whether, the service recipient can claim refund of service tax, the Hon'ble Allahabad High Court, in the case of Indian .....

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ssee to RGTIL in terms of the determination made by the Regulatory Board." 6. There is no provision exist in Section 11B ibid, limiting the filing of refund claim either in Commissionerate having jurisdiction over service provider or that having jurisdiction over service recipient. In such a case, the appellant is entitled to file refund application before any of these authorities. In this regard, the Tribunal in the case of Jindal Steel & Power Limited (supra) has held as under:- 6. Th .....

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bed period of limitation, it is axiomatic that it is entitled to do so before the Commissionerate under whose jurisdiction it pursues its taxable activities, business or is a registrant; or before the Commissionerate having authority over the provider of the service. That would be a matter of a legitimate choice for a claimant of refund. In this case, the appellant had initially filed a claim before the Delhi Commissionerate which rejected the same on the ground that it had no jurisdiction since .....

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r under Section 11B ibid. The provisions of Section 11B ibid are explicit to provide that such recipient-claimant is only required to prove that the tax amount was collected from him. In the instant case, it is evident from the invoices that GAIL had charged service tax from the appellant at the provisional price, which was at the higher side and upon finalization of the price, had issued the credit notes for the differential price. It is also evident from the records that GAIL had deposited the .....

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ssued by GAIL to customers. We wish to draw to your kind attention to the fact that these credit notes have been issued only for the difference in the base value of service i.e. the difference between the initial tariff collected by GAIL and provisional initial pipeline transportation tariff approved by PNGRB. 7. Since there has been a reduction in the value of taxable service on account of the credit notes issued by GAIL and since the service tax in relation to the initial tariff has been colle .....

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ilable in the file, we find that the subject refund had been reflected in Schedule 13 under the head "Loans and Advances" as "Receivable-Govt./Statutory Bodies". Such fact is also evident from the certificate dated 12.01.2011 issued by M/s Ritu G.P. Das, Chartered Accountants. Thus, the above established beyond any shadow of doubt that the excess paid service tax has been borne by the appellant and its incidence has not been passed on to any other person. Therefore, the legal .....

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