Jurisprudentiol-Thursday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Service Tax

Rule 4 of Export of Services Rules, 2005 provides for export of service without payment of tax as export of service is not exigible to tax - amount of tax deposited, therefore, has to be considered as deposit - no time limit for refund of deposit as s.11B applies to refund of tax/duty only: CESTAT

THE respondent is registered with department and had exported its services during the period June, 2005 to March, 2006. Pursuant to raising of the invoices and realization of the payments from the con sumer of the services, rendered outside India, the respondent deposited Service Tax and thereafter applied for refund on 20.3.2007 for an amount of Rs.1,31,538/- under the provisions of Rule 4 read with Rule 5 of the Export of Services Rules, 2005 read with Notification No. 11/2005-ST dated 19.4.2005.

The refund claim was rejected mainly on the ground that it is time barred in terms of Section 11B of the Central Excise Act as applicable via s.83 of FA, 1994.

Income Tax

Whether Income Tax Department can opt for forum-shopping by way of seeking shifting of an appeal pending before Division Bench to constitution of Special Bench - NO: Bombay HC

THE assessee company is engaged in the business of publishing and printing. It had filed its return for the A.Y 2008-2009 declaring a loss of Rs.19.91crores. However, the AO passed an assessment u/s 143(3) determining the assessee's income at Rs. 272.65 crores. On appeal, the CIT(A) confirmed the order of AO. On further appeal, a Division Bench of the Tribunal granted stay of the demand on the assessee making a payment of Rs.12 crores. The appeal however was being adjourned from time to time. During the pendency of the appeal, the CBDT addressed to the President of the Tribunal seeking constitution of special bench of three or more members u/s 255(3). The President of the Tribunal forwarded the said communication to the Vice President of the Tribunal at Hyderabad. Thereafter, the Vice President of the Tribunal addressed a letter to the members of the Division Bench. Consequent to such communication, the Division Bench seized of the assessee's appeal, heard the parties on the issue of constituting a Special Bench of the Tribunal to hear the assessee's appeal. Subsequently, the Tribunal held that there was no need to constitute a Special Bench in view of complication of facts and law, or on the ground that it has large revenue impact or that it would have an effect on proceeding before CBI. However, in view of political sensitivity, as a politician was involved, it concluded that the appeal might be heard before an appropriate bench outside the then State of AP, and so recommended to the President of the Tribunal. Consequent to it, the Tribunal finally recommended that the President of the Tribunal may constitute an appropriate bench outside the state of Andhra Pradesh. The President constituted a Special Bench to hear the assessee's appeal at Hyderabad by members who were not stationed in Hyderabad.

The issues before the Bench are - Whether Special Bench u/s 255(3) can be constituted during pendency of an appeal before the Division Bench and whether the power of the ITAT President to constitute a Special Bench on a debatable issue can be exercised at any point of time and in any manner. NO is the HC's answer.

Customs

Refund of SAD - Notfn.102/2007-Cus - Since original application for refund was filed within time, though before wrong authority, it cannot be said that application was barred by limitation - Appeals allowed: CESTAT

THE issue is grant of SAD refund under notification no. 102/2007-Cusdt. 14.09.2007.

The appellants filed the claim of refund at ICD, Dadri within a period of one year from the date of payment of SAD. However, the goods were imported at CFS, Mulund and the SAD was paid there. By the time the refund claims were forwarded by Customs authorities at Dadri to the authorities at Mulund, a period of over one year had lapsed from the time of payment of duty to the time of receipt of refund claims at CFS, Mulund.

As the lower authorities had denied the refund on the ground of time bar, the appellant is before the CESTAT and submits that a similar issue had arisen in case of CCE vs. AIA Engineering Ltd. in relation to refund of service tax paid on input services used in export of goods under notification no. 41/2007-ST and the Gujarat High Court had in Tax Appeal No. 2266 of 2009, decided on 22.09.2010 held that original application having been filed within time limit though before wrong authority, the claim is not hit by time bar.

See our Columns Tomorrow for the judgements