Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise & ... vs M/S Sudalagunta Sugars Ltd on 11 October, 2013
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order No . 26845 / 2013 Application(s) Involved: ST/Stay/2581/2012 in ST/3542/2012-SM Appeal(s) Involved: ST/3542/2012-SM [Arising out of Order-in-Appeal No. 56/2012 dated 14.9.2012, passed by Commissioner of Central Excise and Service Tax (Appeals), Guntur] Commissioner of Central Excise & Service Tax - TIRUPATI 9/86-A...BEHIND WEST CHURCH COMPOUND, AMARAVATHI NAGAR, M.R.PALLI, AP, 517502. Appellant(s) Versus M/s Sudalagunta Sugars Ltd MAYURANAGAR, KATTUR POST, B.N. KANDRIGA MANDLA, CHITTOOR DIST AP 517640 CHITTOOR DIDT AP 517640 Respondent(s)
Appearance:
Mr. A.K. Nigam, Addl. Commissioner(AR) For the Appellant Mr. K. Krishnamurthy, Adv. For the Respondent CORAM:
HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER ________________________________________ Date of Hearing: 11/10/2013 Date of Decision: 11/10/2013 Copy forwarded to : 1.Commissioner of Central Excise & Service Tax, TIRUPATI
2.The JCDR , CESTAT Bangalore.
3.Indirect Tax Bar Association CESTAT, Bangalore
4.M/s. Centax Publications(P) Ltd.
5.M/s. Company Law Institute of India (P) Ltd.
6.M/s. Taxindiaonline.com (p) Ltd. Bangalore.
7.M/s. Tax Man Allied Services Ltd New Delhi.
8.M/s. Easy Service Tax Online Dot Com P Ltd New Delhi.
9.M/s. Lawcrux Advisors P Ltd. Faridabad.
10.M/s. Mark Professional Services (P) Ltd.
11.Guard File.
Order Per : B.S.V.MURTHY Issue involved is whether the impugned order passed by Commissioner (Appeals) taking a view that respondent is eligible for refund of service tax paid by them in respect of 13000 MTs of sugar exported by them. Revenue is in appeal against the impugned order on the ground that in respect of 7800 MTs of sugar, the real exporter was Merchant Exporter by name M/s INTEREXPORTS. This conclusion has been reached because in addition to commercial invoice produced at Customs office by the respondent, it was found that there was another invoice raised wherein the respondents name as well as name of M/s INTEREXPORTS figured and M/s INTEREXPORTS had been shown as exporter. Besides this, Revenue also has taken note of the fact that in the Bills of Lading, M/s INTEREXPORTS was shown as exporter.
2. Heard both sides and considered the submissions in detail.
3. The matter had come up for hearing on 7.8.2013 during which certain queries were raised and learned AR, at that time, had requested short time for getting clarification from the Commissioner. Today, when the matter was called, clarification received from the Commissioner was also produced and this was also taken on record and took note of by me. Since a lot of time was spent for hearing both sides and discussing various legal provisions and considering the documents before me, I find that appeal itself can be decided since nothing is left for consideration at a later date. Accordingly, the appeal itself is taken up for consideration.
4. The questions raised at the time of last hearing and clarification received are reproduced as under :
1. Whether the Shipping Bills were in the name of M/s Sudalagunta Sugars Ltd., B.N. Kandriga Mandal, Chittoor Dist. (jointly with the third party or independently):
Yes. All the Shipping Bills were in the name of M/s Sudalagunta Sugars Ltd., B.N. Kandriga Mandal, Chitoor Dist., independently.
2. Whether the invoices of CHA were in the name of M/s Sudalagunta Sugars Ltd., B.N. Kandriga Mandal, Chittoor Dist. (jointly with the third party or independently):
Yes. All the invoices of CHA were in the name of M/s Sudalagunta Sugars Ltd., B.N. Kandriga Mandal, Chitoor Dist., independently
3. Whether the invoices of exports were issued by M/s Sudalagunta Sugars Ltd., B.N. Kandriga Mandal, Chittoor Dist. (jointly with the third party or independently):
The applicant has submitted copies of Commercial Invoices, in which the Exporter is mentioned as M/s Sudalagunta Sugars Ltd., B.N. Kandriga Mandal, Chittoor Dist. However, in case of Third party exports, the exporter is mentioned as M/s Sudalagunta Sugars Ltd., B.N. Kandriga Mandal, Chittoor Dist. And the Third Party Exporter as Interexports, 5, Bhaveshwar Vihar, 383/A, S.V.P. Road, Mumbai 400004, India.
4. Wherein pursuance of the order of Commissioner (A) the refund has been already given to the assessee.
This office has not given any refund to the claimant i.e., M/s M/s Sudalagunta Sugars Ltd., B.N. Kandriga Mandal, Chittoor Dist. In pursuance of OIA No. 56/2012 (T) CE dated 14.9.2012 passed by Commissioner (Appeals).
It is further submitted that M/s Sudalagunta Sugars Ltd., B.N. Kandriga Mandal, Chittoor Dist. Consequent to OIA No. 56/2012 (T) CE dated 14.9.2012 passed by Commissioner (Apepals) have filed a fresh refund claim for Rs. 6,78,106/- on 16.7.2013 which is still pending. There is no dispute that all the Shipping Bills are in the name of respondent only. The only ground for rejecting the refund claim is that Commercial Invoice was raised by M/s INTEREXPORTS. M/s INTEREXPORTS was the person to whom payments were made and the Bills of Lading were also in the name of M/s INTEREXPORTS.
5. Learned AR relied upon extract of Foreign Trade Policy which was extracted in order-in-original and submitted that as per the Foreign Trade Policy, appellant was bound to export by declaring export as third party export. According to the Foreign trade Policy extracted by the original adjudicating authority who has noted that - export made by an exporter on behalf of another exporter. In such cases, export documents such as Shipping Bills shall indicate name of both manufacturer and the third party exporter, BRC, GR declaration, export order and invoice should be in the name of the third party. According to AR, this is a mandatory and statutory requirement and since the respondent did not fulfill the same, the department was right in going through the documents to come to a conclusion as to who is the real Exporter and who is entitled to refund.
6. According to my understanding, Foreign Trade Policy is not a mandatory requirement for the purpose of third party exports. Foreign Trade Policy requires an exporter to be identified for the purpose of determination of eligibility for export benefits and for this purpose, the third party exporter is required to be mentioned in all the documents. If the Shipping Bills do not contain the name of third party exporter, the third party exporter who is a Merchant Exporter would not be the exporter in the eyes of law. This is what is intended in the extracted portion of the Foreign Trade Policy. As far as the present issue is concerned, in my opinion, what is to be seen is whether the respondent can be considered as exporter and whether in terms of Notification can be considered as eligible for exemption. According to Section 2(20) of the Customs Act, 1962, exporter, in relation to any goods at any time between their entry for export and the time when they are exported, includes any owner or any person holding himself out to be the exporter. Therefore, if the exporter is to be identified as per the Customs Act, the person whose name appears in the Shipping Bills is an exporter of the goods. This conclusion becomes more obvious when we consider the provisions of sub-section (16) which provides entry in relation to goods means an entry made in a bill of entry, shipping bill or bill of export. What Revenue is proposing in this case is going beyond the documents produced before Customs and going beyond a document which is statutorily required and going beyond the document which determines who is the exporter in accordance with statutory provisions. In my opinion, this is not correct. At this stage, it is necessary to consider the decision relied upon by learned AR to submit that the refund can be allowed only to the exporter and when the goods are exported through merchant-exporter, it cannot be claimed. She relies upon Tribunals decision in the case of Noble Grain India Pvt. Ltd. [2011 (22) S.T.R. 189 (Tri.-Mumbai)]. I find that this decision is not at all applicable. In that case, it was merchant-exporter who had paid the service tax on the services received by him. In fact, there is a clear finding that the services were received by manufacturer through third party / merchant-exporter. In this case, therefore, I do not think the ratio in Noble Grain India Pvt. Ltd. (supra) case can be applied to the present case. I also consider Notification No. 17/2009-S.T. dated 7.7.2009, amended subsequently under which refund has been made. According to this notification, exemption for the taxable service which is extended in the form of refund is available in respect of taxable service received by exporter of the goods and used for export of the goods. There is no definition in the notification or in the Central Excise Act. Since the refund is for the export of goods, it would be appropriate to take the definition of exporter in the Customs Act for this purpose. In this case, the respondent has fulfilled all the conditions since name of the respondent has figured in the Shipping Bills; the goods have been exported. There is no dispute in this aspect and service has been used for export of goods and service tax has been suffered by manufacturer. Since all the conditions of the notification have been fulfilled, I do not find any merit in the appeal filed by Revenue. Consequently, the appeal is rejected.
(Dictated and pronounced in open court) (B.S.V. MURTHY) TECHNICAL MEMBER /vc/