Kolland Developers Pvt. Ltd. ... vs The Commissioner Of Central ...
2021 Latest Caselaw 15728 Bom

8-J-CEL-06-19                                                                    1/7


                IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                          NAGPUR BENCH, NAGPUR.

                      CENTRAL EXCISE APPEAL NO.06 OF 2019


Kolland Developers Pvt. Ltd.
A Company incorporated under the
Companies Act, 1956, having its
70, Nagindas Master Road, Fort,
Mumbai, Mumbai City MH 400 023 IN.                           ... Appellant

-vs-

The Commissioner of Central Excise
and Customs (Appeals), Nagpur, having
his office at 2nd Floor, Room No.221,
Civil Lines, Telangkhedi Road,
Nagpur 440 001                                               .. Respondent


Shri Jas Sanghvi, Advocate with Shri R. Tajne, Advocate for appellant.
Shri S. N. Bhattad, Advocate for respondent.

                  CORAM : A. S. CHANDURKAR AND G. A. SANAP, JJ.

DATE : November 15, 2021

Judgment : (A. S. Chandurkar, J.)

Admit on the following substantial question of law :

" Whether the Customs, Central Excise and Service Tax Appellate Tribunal ought to have followed its own decision in Mahindra Engineering Services Ltd. vs. Commissioner of Central Excise, Pune-I 2015 (38) STR 841 (Tri-Mumbai) especially when the same was after considering the effect of Notification No.9/2009 which now has been superceded by Notification No.12/2013 which is applicable in the facts of the present case ?"

Heard learned counsel for the parties.

8-J-CEL-06-19 2/7

2. The facts giving rise to this appeal under Section 35G of the

Central Excise Act, 1944 (for short, the said Act) are that the appellant is a

Company incorporated under the Companies Act, 1956. It is authorised to

develop Information Technology and related services at the Special Economic

Zone at MIHAN, Nagpur under the Special Economic Zone Act, 2005. For

the purposes of development of the aforesaid services the appellant

appointed M/s Shapoorji Pallonji & Co. Pvt. Ltd. as its contractor and sought

various services from it. These services were classified under the category of

Business Auxiliary Services. After the services provided from the period April

2009 to September 2010 the said service provider raised four debit notes for

an amount of Rs.16,19,707/- towards service tax. The appellant with a

view to seek refund of the service tax applied to the competent approving

authority on 14/07/2010 and sought necessary approval in terms of

Notification No.9/2009. The Approval Committee on 27/08/2010 granted

necessary approval as sought by the appellant. Notification No.09/2009 was

thereafter superceded by Notification No.17/2011 and thereafter by

Notification No.12/2013. On 18/09/2013 the appellant paid the service

provider the amount of Rs.16,19,707/- and thereafter on 29/09/2014 the

appellant filed a refund claim in terms of Notification No.12/2013. On

10/02/2015 a show cause notice was issued to the appellant calling upon it

to show cause as to why the refund claimed for an amount of Rs.11,86,949/-

should not be rejected under Section 11B(1) of the said Act. The appellant 8-J-CEL-06-19 3/7

replied to the same on 27/02/2015 and justified its entitlement to such

refund. The Assistant Commissioner on 24/03/2015 rejected the claim for

refund that was admissible for the period from April 2009 to September 2010

for an amount of Rs.11,86,949. He however allowed the refund for the

amount of Rs.4,32,757/- and Rs.49,440/- for the services rendered after the

grant of approval. The appellant preferred an appeal and the Commissioner

(Appeal) dismissed the said appeal on 27/11/2015. The appellant then

approached the Appellate Tribunal which by the order dated 10/06/2016

dismissed the same by holding that the appellant had not got the services in

question duly approved by the Approval Committee and hence it was not

entitled for the claim for refund under Notification No.12/2013. This order

is the subject matter of challenge in the present appeal.

3. Shri J. Sanghvi, learned counsel for the appellant interalia

submitted that the Tribunal was bound by its earlier order dated 10/10/2014

reported in 2015 (38) S.T.R. 841 in the case of Mahindra Engineering Services

Ltd. vs. Commissioner of C. Ex. Pune-I . According to him the facts of that

decision indicated that the Tribunal had noted that Notification No.09/2009

did not require the requisite services to be approved by the Approval

Committee before providing the same. The appellant therein had filed a

refund claim after the approval was granted and this fact was similar to the

facts in the present case. The Tribunal however disregarded that decision by 8-J-CEL-06-19 4/7

observing that the Revenue in that case had not argued that the conditions of

Notification No.9/2009 were required to be fulfilled at the time of availing

exemption. He submitted that in the light of its own decision in Mahindra

Engineering Services Ltd. (supra) the learned Member either ought to have

followed the same or if he was not inclined to do so, the question should

have been referred to a larger bench as held by the Division Bench of this

Court in Mercedes Benz India Pvt. Ltd. vs. Union of India 2010 (252) E.L.T. 168

(Bom.). It was not permissible for the Tribunal to have disregarded its own

order passed earlier. He then submitted that even on a plain reading of

Notification No.12/2013 there was no requirement of obtaining prior

approval of the Approval Committee before availing the services as per

Condition 3(1). The respondent No.1 therefore erred in not granting the

benefit of Notification No.12/2013 as sought by the appellant.

4. Shri S. N. Bhattad, learned counsel for the respondent supported

the impugned order. According to him the Tribunal was justified in holding

that the conditions requisite for claiming the benefit under Notification

No.12/2013 had not been fulfilled by the appellant. Since Notification

No.12/2013 was an exemption Notification, the Tribunal rightly held that all

necessary conditions were required to be fulfilled for claiming benefit. He

referred to the stand taken in that regard in the submissions filed to the

present appeal and submitted that the appeal ought to be dismissed. He 8-J-CEL-06-19 5/7

relied upon the decisions in U.O.I. vs. Ganesh Metal Processors Inds. 2003(151)

E.L.T. 21 and Commissioner of Customs (Preventive), Mumbai vs. M/s M. Ambalal

and Co. 2010 (260) E.L.T. 487 in support of his contention.

5. On hearing the learned counsel for the parties and after giving due

consideration to their respective submissions we are of the view that the

learned Member of the Tribunal was not justified in distinguishing the earlier

decision of the Tribunal rendered in the case of Mahindra Engineering Services

Ltd. (supra) on the ground that the argument that all conditions of the said

Notification had to be fulfilled while availing the exemption in question. The

Tribunal in Mahindra Engineering Services Ltd. (supra) while considering the

effect of Notification No.09/2009 had in paragraph 6 of its order held that

said Notification did not require the approval from the Approval Committee

to be obtained prior to providing the services in question. It also noted that

the refund claimed therein had been filed after approval was granted by the

Approval Committee. This was held to be sufficient compliance with the

requirements of Notification No.09/2009. The appellant before the Tribunal

had also raised a contention that the conditions of Notification No.09/2009

were similar to the conditions in Notification No.12/2013. We find that the

impugned order of the Tribunal does not consider the latter contention raised

by the appellant for if that contention were to be accepted by the Tribunal, it

either ought to have followed its earlier view in Mahindra Engineering Services 8-J-CEL-06-19 6/7

Ltd. (supra) or if it was not inclined to do so, it ought to have referred the

question to a larger bench as held in Mercedes Benz (India) Pvt. Ltd. (supra).

Even otherwise we find that merely because a particular argument was not

raised when the earlier proceedings were decided would not be a sufficient

ground to disregard an earlier adjudication made on merits. It would be

open for the Tribunal in subsequent proceedings to doubt the correctness of

the view earlier taken and refer the question to a larger bench but it would

not be permissible to disregard the earlier view on the ground that a

particular contention was not raised when the earlier order was passed.

6. Since we prima facie find that the appellant was justified in

relying upon the earlier decision of the Tribunal in Mahindra Engineering

Services Ltd. (supra) and that the Tribunal was not justified in disregarding its

earlier order, we find that re-consideration of the proceedings by the

Tribunal is warranted in this backdrop. Accordingly the substantial question

of law as framed is answered by holding that the Customs, Central Excise and

Service Tax Appellate Tribunal ought to have considered the effect of its

earlier decision in Mahindra Engineering Services Ltd. (supra). If it was of the

opinion that said view required re-consideration, the option of referring that

question to a larger bench ought to have been exercised. In view of the

aforesaid answer the following order is passed :

i)          The order dated 10/06/2016 passed by the Customs, Excise and
           8-J-CEL-06-19                                                                     7/7


                            Service   Tax     Appellate    Tribunal,       Mumbai   in   Appeal
                            No.ST/85448/16 is set aside.


             dfii)          The proceedings are remanded to the Tribunal to decide the

appeal afresh on its own merits and in accordance with law. Since the proceedings pertain to the year 2016, the Tribunal is requested to decide the same expeditiously within a period of four months from the production of a copy of this order.

iii) Central Excise Appeal No.06/2019 is allowed in aforesaid terms leaving the parties to bear their own costs.

                                              JUDGE                            JUDGE




          Asmita




Digitally signed byASMITA
ADWAIT BHANDAKKAR
Signing Date:17.11.2021
17:29:24