Custom, Excise & Service Tax Tribunal
Transworld Garnet India Pvt Ltd vs Commissioner Of Gst&Amp;Cce(Madurai) on 2 January, 2020
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL, CHENNAI
REGIONAL BENCH - COURT NO. - III
Service Tax Appeal No. 41560 of 2019
(Arising out of Order-in-Appeal No.215/2019 dated 27.6.2019 passed by the
Principal Commissioner of GST & Central Excise (Appeals), Coimbatore)
M/s. Transworld Garnet India Pvt. Ltd. Appellant
Palayamkottai Road
(Opp. Tuticorin Airport)
Kuttudankadu
Tuticorin - 628 103.
Vs.
Commissioner of GST & Central Excise Respondent
Central Revenue Buildings Bibikulam, Madurai - 625 002.
APPEARANCE:
Shri A.K. Jayaraj, Advocate for the Appellant Shri Arul C. Durairaj, Superintendent (AR) for the Respondent CORAM Hon'ble Ms. Sulekha Beevi C.S., Member (Judicial) Final Order No. 40031 / 2020 Date of Hearing: 02.01.2020 Date of Decision: 02.01.2020 Brief facts are that the appellants who are 100% EOU filed refund claim dated 15.6.2017 for refund of Rs.2,40,996/- being the service tax paid on taxable services availed by them for export of the goods. The said refund claim was filed under Notification No.41/2012- ST dated 29.6.2012. The appellant had exported 'Garnet Abrasive' falling under Chapter sub-heading 25 of CETA, 1985. The refund claim was rejected by the department on the ground that consequent to allegation of illicit mining of beach sand, the Government of Tamil Nadu vide GO dated 8.8.2013 and 17.9.2013 had banned mining of beach sand miners and also formed District level committee to verify 2 the allegation. The said committee had recorded in their minutes that the appellant had unlawfully mined the raw sand and other minerals and transported in excess of the permitted quantity of mining during the period 2008 - 09 to 2012 - 13. Against the rejection of refund claim, the appellant filed appeal before Commissioner (Appeals) who upheld the rejection. Hence this appeal.
2. On behalf of the appellant, ld. counsel Shri A.K. Jayaraj appeared and argued the matter. He submitted that the appellant had exported the goods and filed refund claim as per Notification 41/2012-ST dated 29.6.2012. The appellant had fulfilled all the conditions as required under the notification. The department does not have a case that the appellant has not fulfilled any of the conditions or has not paid service tax on the services availed for export of the goods. The rejection is on the allegation that the appellant has done illicit mining of minerals and beach sand. The said allegation is pending before the committee constituted by the Collector, Tirunelveli District. Any violation under the said State law has to be dealt with as per the provisions of the said Act and the department cannot reject the refund claim when the appellant has suffered tax on the goods which has been exported. He submitted that the appellant has appraised the entire facts as well as the legal provisions in the reply to the Show Cause Notice submitted to the department. He submitted that since there is no violation under the provisions of Customs Act or the Finance Act, 1994, the department cannot reject the refund claim.
3. The ld. AR Shri Arul C. Durairaj appeared and argued for the department. He supported the findings in the impugned order and added that when the appellant has done unlawful mining, the goods 3 attained the character of contraband and therefore the rejection of refund is legal and proper.
4. Heard both sides.
5. On perusal of the impugned order as well as after hearing the submissions of both sides, I find that the ground for rejection is on an allegation that the appellant has done unlawful mining of raw sand and other minerals in excess of the permission granted to them. This aspect has to be looked into by the Govt. of Tamil Nadu as well as the committee formed for this purpose. The provisions of Mines and Minerals Act of the State has to look into the legal consequences of unlawful mining. When the appellant has exported the goods paying service tax on the services availed for exporting the goods, the department cannot deny the refund stating reasons beyond the Customs Act as well as Finance Act. Notification 41/2012 emanates from the Finance Act and therefore only if there is violation under the said Act as well as the notification, refund can be rejected. Since the department does not have a case that the appellants have violated provisions of the Finance Act or the notification, I am of the opinion that the rejection of refund claim cannot sustain.
6. From the above discussions, the impugned order is set aside and the appeal is allowed with consequential relief, if any.
(Dictated and pronounced in open court) (SULEKHA BEEVI C.S.) Member (Judicial) Rex