At, Customs Excise Service Tax Appellate Tribunal South Zonal Bench At Chennai
By, THE HONORABLE JUSTICE: SULEKHA BEEVI C.S.
By, MEMBER AND THE HONORABLE JUSTICE: MADHU MOHAN DAMODHAR
For Petitioner: S. Muthuvenkataraman, Advocate And For Respondents: S. Govindarajan, AC (AR)
1. Brief facts are that appellants are engaged in marketing products manufactured by M/s. CPCL and are paying service tax under the category of Transport of Goods by Road. Due to amalgamation of M/s. IBP Co. Ltd. with the appellants, with effect from 1.4.2004, they filed a refund claim on 31.1.2008 for the service tax paid for storage and warehousing charges for the period from April 2004 to February 2006. A show cause notice was issued proposing to reject the refund claim and after due process of law, the original authority rejected the refund. Against this, the appellant filed appeal before the Commissioner (Appeals) who rejected the appeal holding
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that the demand is time-barred. Hence the appellants are before this Tribunal.
2. The Ld. counsel Shri S. Muthuvenkataraman argued on behalf of the appellant. He adverted to the show cause notice and argued that the allegation raised in the show cause notice is that the refund claim is time barred for non-production of documents evidencing the payment of service tax. That no reasons were supported in the show cause notice to allege that the refund claim is time-barred. However, the adjudicating authority as well as the lower appellate authority made detailed discussions with regard to the time-bar. It was held by them that the refund claim filed after more than a year of the payment of service tax is hit by limitation. But the said view is incorrect for the reason that the refund has arisen pursuant to the order of amalgamation of the two units. The order in scheme of amalgamation was made by the concerned authority on 30.4.2007 with effective date of amalgamation fixed as 1.4.2004. That for all the practical purposes, M/s. IBP & Co. Ltd. got merged with the appellant-company with effect from 1.4.2004. During the said period, two companies had merged losing their individual identity vis-à-vis their status. Hence service provided by the appellant to IBP Co. Ltd. during the said period would amount to provision of services to themselves and not to a distinct service recipient or distinct person and any payment of service tax on the said services would amount to erroneous payment and thus the appellants are eligible for refund. As per section 65(zzza) of the Finance Act, storage and warehousing services rendered to any person is taxable. Pursuant to merger, as there is no distinct service recipient from the appellant, it has to be construed that the appellant has not rendered the said services. There upon the appellant filed the refund claim. The final merger order having been issued on 30.4.2007, the relevant date as per clause (ec) of section 11B would be the date of order of Ministry of Company Affairs passing the order of amalgamation. The view taken by the authorities below that the relevant date is the date of payment of service tax and that the refund claim is therefore hit by time-bar is a wrong interpretation of the provisions of law. He relied upon the decisions of the Tribunal in the cases of Commissioner of Central Excise Vs. IOC Ltd. : 2011 (23) STR 625 and also IOC Ltd. Vs. Commissioner of service Tax, Mumbai : 2015 (37) STR 575. The Ld. counsel submitted that the later decision rendered in the case of IOC Ltd. (supra) is pari materia to the facts of the present case as well as the order of amalgamation dated 30.4.2007 and the merge made effective from 1.4.2004.
3. The Ld. AR Shri S. Govindarajan reiterated the findings in the impugned order. The case of the appellant is that the relevant date under section 11B is the order of amalgamation dated 30.4.2007 is incorrect. He referred to clause (ec) of section 11B and submitted that the said sections can be considered to be the relevant date only if there are disputes pending with regard to the duty/service tax, when a court or appellate authority passes an order with regard to the dispute. The term order is said to be taken by the appellant out of context. That the reading of the clause (ec) of section 11B indicates that judgment, an order of direction should be that of an appellate authority, appellate Tribunal or any court. In other words, refund should arise out of successful litigation of a dispute before the appellate forum for the date of the order to be taken as the relevant date. In the present case, there can be no dispute that the order giving rise to the cause of action in not an order in the course of dispute relating to the amount claimed as refund. In this regard the legal maxim noscitur a socials may be referred under which associated words take their meaning from one another. The term order being associated with appellate proceedings should be interpreted as an order arising from such appellate proceedings and not any order which may initiate cause of action to file the refund claim. The decisions relied by the appellants are single Member decisions and are not binding upon Division Bench. That the refund has been rightly rejected by the authorities below.
4. Heard both sides.
5. The common ground of argument by both sides is on the issue with regard to the relevant date for determination whether the refund claim has been filed within time. The Ld. counsel for appellant has raised a contention adverting to the show cause notice and submitting that the show cause notice does not allege any ground of rejecting the refund claim on the sole ground of limitation. We find merit in this argument. In the show cause notice the allegation raised is that the claim is proposed to be rejected as being time-bar for non-production of documents evidencing the payment of service tax. Needless to say that non-production of document is not a ground for considering the claim to be time-barred. In the show cause notice there is no whisper as to what is the relevant date considered or the date for determining the claim to be time-bar. The refund sanctioning authority as well as the lower appellate authority have travelled beyond the show cause notice to conclude that the relevant date is the date of payment of service tax and that sub-clause (ec) of section 11B does not apply. For this reason, we hold that the rejection of refund claim is unjustified. Without stating the allegations in clear language in the show cause notice so as to allow the appellant to defend their case, the department cannot reject the refund claim by extending the allegations at the time of adjudication.
6. In the result, the impugned order is set aside and the appeal is allowed with consequential relief, if any.
(Operative portion of the order was pronounced in open court.