M/S Choubay And Company (Agencies) vs. The Commissioner GST, Customs And Central Excise And Another

Facts

M/s Choubay And Company (Agencies) filed a refund application on 23.09.2016, seeking Rs. 8,04,232/- which they claimed was erroneously deposited as service tax. They asserted that the services rendered were exempted under Mega Exemption Notification No.25/2012-ST dated 20.06.2012 for the period September, 2012 to August, 2014. The Assistant Commissioner, CGST & CX, Division-II, Kanpur, rejected the claim. The Commissioner (Appeals), CGST & Central Excise Appeal Commissionrate, Allahabad, also rejected the refund claim, holding it to be time-barred under Section 11B of the Central Excise Act, 1944, without adjudicating on the exemption claim. The Customs, Excise and Service Tax Appellate Tribunal further bypassed this issue. The appellant is appealing against the Tribunal's order.

Held

The Court held that both the Commissioner (Appeals) and the Customs, Excise and Service Tax Appellate Tribunal had failed to adjudicate on the crucial issue of whether the appellant was entitled to the benefit of the Mega Exemption Scheme. The Commissioner (Appeals) had noted the appellant's grounds, including the non-applicability of Section 11B if exemption was granted, but did not address this specific point in its order. Similarly, the Tribunal bypassed this issue. The Court found that there was no adjudication on whether the limitation under Section 11B would come into play if the exemption was allowed. Therefore, the Court set aside the orders of the Commissioner (Appeals) and the Tribunal. The matter was relegated to the Commissioner (Appeals) for a fresh decision in accordance with the law, specifically to examine the appellant's claim for the benefit of the Mega Exemption Scheme and its impact on the limitation period.

Key Issues

1. Whether the Customs, Excise and Service Appellate Tribunal erred in ignoring the appellant's claim regarding the applicability of Entries No.12(a) and 12(c) of the Mega Exemption Notification No.25/2012-ST dated 20.06.2012, while rejecting the refund claim on the ground of limitation under Section 11B of the Central Excise Act, 1944? Appellant's contention: The appellant argued that if their services are found to be exempted under the Mega Exemption Scheme, the limitation prescribed under Section 11B of the Central Excise Act, 1944, would not be attracted. They claimed to have submitted necessary documents to support their exemption claim, which was illegally denied by the authorities. They relied on judicial pronouncements and argued that the amount paid was in the nature of a deposit, not service tax. Revenue's contention: The revenue defended the impugned orders, arguing that the issue raised could not be entertained within the limited scope of appeal under the Central Excise Act, 1944.