C.S.T., Delhi vs Genpact India

Revenue is in appeal against order-in-appeal dated 30.9.2010 which set aside the order-in-original dated 3.10.2007 which had rejected the refund

claim of Rs.20,41,984/- filed by the respondent.

The facts of the case are as under:

The respondent registered under Business Auxiliary Service, filed refund claim of Rs.20,41,984/- on 31.3.2006 under Rule 5 of Cenvat Credit Rules,

2004 read with Notification No.5/2006-CE (NT) dated 14.3.2006 for the month of April 2005. The primary adjudicating authority rejected the refund

claim on the ground that Rule 5 of Cenvat Credit Rules 2004 was substituted vide Notification No.4/2006-CE (NT) dated 14.3.2006 to enable the

refund of unutilized cenvat credit to manufacturers and service providers and prior to 14.3.2006 it was applicable only to rnanufacturerj to claim refund

of untilised cenvat credit. The primary adjudicating authority observed that the period of refund claim was April 2005 which was prior to issue of said

notification and as the respondent was a service provider it was not entitled to refund. The Commissioner (Appeals) vide impugned order, on the basis

of CESTAT judgment in WNS Services (P) Ltd. vs. C.C.E., Mumbai - 2008 - TIOL - 228 - CESTAT - MUM held that respondent was entitled to the

refund of unutilised cenvat credit on the services used in output services exported even prior to the date of amendment of the said Rule 5 i.e.

14.3.2006 subject to the provison of Section 11B of the Central Excise Act, 1944 and other conditions stipulated in Rule 5 ibid and Notification issued

in this regard.

In its grounds of appeal, Revenue has submitted that the Id. Commissioner (Appeals) has erred is allowing the benefit of Rule 5 of Cenvat Credit

Rule 2004 as amended vide Notification No.04/2006- CE (NT) dated 14.3.2006 to the provider of output service before 14.3.2006 as amended Rule 5

of Cenvat Credit Rules, 2004 is not applicable to the refund emanating from the export made prior to 14.3.2006.

In its cross-objection and during the hearing, the respondent stated that -

(i) the appeal was filed without being recommended by the Committee of Commissioners.

(ii) The issue is fully covered in its favour by judgment of CESTAT in the case of WNS Global Services (P) Ltd. which was subsequently confirmed

by Bombay High Court. It also referred to the judgment of Supreme Court in the case ofM ysore Rolling Mills Private Limited vs. C.C.E., Belgaum -

1987 (28) ELT 50 (SC) to support the proposition that the amendment relates to the earlier period also.

We have considered the contentions of both sides. As regards the contention that the appeal has been preferred without approval of the Committee

of Commissioners, Section 35B of the Central Excise Act, 1944 made applicable to service tax vide Section 83 of the Finance Act, 1994 reads as

under:

SECTION 35B. Appeals to the Appellate Tribunal. -(1) Any person aggrieved by any of the following orders may appeal to the Appellate

Tribunal against such order -

(a) a decision or order passed by the [Principal Commissioner of Central Excise or Commissioner of Central Excise] as an adjudicating

authority;

(b) an order passed by the [Commissioner (Appeals)] under section 35A;

 (1A) Every appeal against any order of the nature referred to in the first proviso to sub-section (1), which is pending immediately before

the commencement of Section 47 of the Finance Act, 1984, before the Appellate Tribunal and any matter arising out of, or connected with,

such appeal and which is so pending shall stand transferred on such commencement to the Central Government, and the Central

Government shall deal with such appeal or matter under section 35EE as if such appeal or matter were an application or a matter arising

out of an application made to it under that section.

(1B)(i) The Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963) may, [by order],

constitute such Committees as may be necessary for the purposes of this Act.

(ii) Every Committee constituted under clause (i) shall consist of two Chief Commissioners of Central Excise or two Commissioners of

Central Excise, as the case may be.

(2) [The Committee of Commissioners of Central Excise may, if it is] of opinion that an order passed by the Appellate [Commissioner of

Central Excise] under section 35, as it stood immediately before the appointed day, or the [Commissioner (Appeals)] under section 35A, is

not legal or proper, direct any Central Excise Officer authorised by him in this behalf (hereafter in this Chapter referred to as the

authorised officer) to appeal [on its behalf] to the Appellate Tribunal against such order.

Provided that where the Committee of Commissioners of Central Excise differs in its opinion regarding the appeal against the order of the

Commissioner (Appeals), it shall state the point or points on which it differs and make a reference to the jurisdictional [Principal Chief

Commissioner of Central Excise or Chief Commissioner of Central Excise] who shall, after considering the facts of the order, if is of the

opinion that the order passed by the Commissioner (Appeals) is not legal or proper, direct any Central Excise Officer to appeal to the

Appellate Tribunal against such order.

Explanation. - For the purposes of this sub-section, ""jurisdictional Chief Commissioner"" means the [Principal Chief Commissioner of

Central Excise or Chief Commissioner of Central Excise] having jurisdiction over the adjudicating authority in the matter.]

As is evident from sub-section (2) of Section 356 quoted above, appeal against the order of Commissioner (Appeals) is to be filed on the

recommendation of Committee of Commissioners. In the judgment of Delhi High Court in the case of Commissioner of Central Excise, Delhi I vs. Shri

Ram Udyog - 2014 (310) ELT 259 (Del.), the Hon'ble High Court essentially held that Committee of Chief Commissioners is not required for filing

appeal against the order of Commissioner (Appeals). Thus the said order is no authority to the proposition that recommendation of the Committee of

Commissioners is not required for filing of appeal against the Commissioner (Appeals)'s order.

Even on merit, it is seen that CESTAT in the case of WNS Global Services (P) Ltd., after a detailed analysis, held as under:

We, therefore, hold that in the present circumstances, where the refund claims were filed after the amendment, and satisfies every

requirement of Rule 5 and the notification issued thereunder, the refund, cannot be rejected as there was no condition in the notification or

rules that such refund would apply only in respect of the exports made after 14-3-2006. Once the refunds are under the amended rules and

the notification issued thereunder, as already held, the same cannot be denied merely because they relate to the exports made prior to the

date of amendment.

The above judgment of the CESTAT has been upheld by the Bombay High Court in the case ofC ST, Mumbai vs. WNS Global Service (P) Ltd. -

2011 (22) STR 609 (Born.).

In view of the foregoing, we find no merit in Revenue's appeal and the same is therefore dismissed.