Custom, Excise & Service Tax Tribunal
M/S Chambal Fertilizers And Chemicals ... vs C.C.E. Jaipur-I on 4 March, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. IV
Service Tax Appeal No. ST/1629/2011-ST[SM]
[Arising out of Order-In-Appeal No. 344(DKV) ST/JPR-I/2011 dated 16.08.2011 passed by Commissioner (Appeals) Jaipur]
For approval and signature:
Hon'ble Mr. S.K. Mohanty, Member (Judicial)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
M/s Chambal Fertilizers and Chemicals Ltd. ...Appellant(s)
Vs.
C.C.E. Jaipur-I Respondent(s)
Appearance:
Mr. Narender Singhvi (Advocate) for the Appellant Mr. M. R. Sharma (DR) for the Respondent CORAM:
Hon'ble Mr. S.K. Mohanty, Member (Judicial) Date of Hearing/ Decision. 04.03.2016 Final Order No. 51217/2016_ Per S. K. Mohanty:
This appeal is directed against the impugned order dated 10.08.2011 passed by the Commissioner of Customs and Central Excise (Appeals-I), Jaipur, upholding rejection of refund claim of Rs. 12,33,872/- in the Adjudication order.
2. The brief facts of the case are that the appellant is engaged in the manufacture of exempted excisable goods, namely, Urea. The appellant is duly registered with the Central Excise Commissionerate in Kota. For manufacture of Urea, natural gas is used as a raw material, which the appellant procures from M/s Reliance Gas Transportation Infrastructure Ltd., Mumbai (RGTIL). Transmission charges for transportation of Natural gas are regulated by PNGRB. During the period April 2009 to May 2010, RGTIL supplied natural gas to the appellant at the rate of 68.56 MMBTU. Since natural gas is regulated and the price determined by the regulatory authority, the charges for the said period was finalized on 9.6.2010 by PNGRB @ 67.64 MMBTU. For adjusting the excess amount charged, the supplier M/s RGTIL issued two numbers of credit notes to the appellant, crediting Rs. 1,19,78,338/- towards the value of the services. However, no credit notes were issued representing the excess payment of service tax into the Government Exchequer. Since the appellant is the recipient of services and the incidence of service tax has been borne by it, the appellant had filed the refund application before the Jurisdictional Service Tax Authorities, claiming refund of the excess service tax paid on the transmission charges. The refund application was denied by both the authorities below on the ground that the service tax amount has not been paid by the appellant and the same has been paid by the service provider M/s RGTIL, and thus, the refund claim filed by the appellant is not maintainable. The other ground assigned for rejection of the refund application is that the appropriate authority for sanction of the refund amount is the service tax authorities having jurisdiction over the premises of the service provider and not the service receiver; that since the refund application has been filed before the wrong authority, the same is not maintainable. Rejection of refund application is the subject matter of present dispute before the Tribunal.
3. Sh. Narender Singhvi, the Ld. Advocate appearing for the appellant submits that the downward revision in price of natural gas is not under dispute, thus service tax paid at the higher rate should be entitled for refund. To substantiate his stand that refund claim cannot be denied to the appellant, the Ld. Advocate has relied on the judgment of Honble Allahabad High Court in the case of Commissioner of Customs, Central Excise and Service Tax vs. Indian Farmer Fertilizers Coop. Ltd. [2014 35 STR 492 Albd] and also the decision of this Tribunal in the case of Ms. Jindal Steel & Power Ltd. vs Commr. of Customs and Central Excise [2014-VIL-539-CESTAT-DEL-ST].
4. On the other hand, the Ld. DR, Sh. MR Sharma reiterates the findings recorded in the impugned order. To support rejection of refund application by Revenue, the Ld. DR has relied on the judgment of Honble Supreme Court in the case of Oswal Chemicals and Fertilizers Ltd. [2015 (318) ELT 617 (S.C.].
5. I have heard the Ld. Counsel for both the sides and perused the records.
6. It is an admitted facts that as a result of downward revision of price of transmission charges, the supplier M/s RGTIL has issued the credit note, crediting the account of the appellant for the service charges received by it at a higher price.
7. The fact is not in dispute that excess service tax has been paid, for which refund application is maintainable under the statute. The dispute involved in this case relates to the Jurisdictional Service Tax authority, who is component to decide the refund application. Since, the appellant in the capacity of recipient of service has filed the refund application before the Central Excise Authorities at Kota, the same in my opinion, is proper and maintainable under Section 11B of the Central Excise Act, 1944 (made applicable to service tax under Section 83 of the Finance Act, 1994).
8. With regard to the observations of the authorities below that the appellant as a recipient of service is not entitled to file the refund application, I am of the view that since the incidence of service tax has been borne by the appellant itself, the refund claim can very well be lodged by him claiming refund of excess service tax paid to the supplier of goods which was ultimately deposited into the Government Exchequer. I find that both the issues arising out of the present dispute are squarely covered by the decision of this Tribunal in the case of Jindal Steel & Power Ltd. (Supra). The relevant paragraph in the said decision are extracted herein below.
6. The fact that the recipient of the service is also entitled to file a claim for refund is no longer res-integra. The issue stand concluded by the Constitution Bench decision in Mafatlal Industries Limited vs. Union of India 1997 (89) ELT 247 (SC). This decision was followed in Indian Farmer Fertilizer Co-op. Ltd., vs. CCE, Meerut-II 2014 (35) STR 422 (Tri. Del.). If the appellant which is a recipient of a service which is admittedly not taxable files a claim for refund within the prescribed period of limitation, it is axiomatic that it is entitled to do so before the Commissionerate under whose jurisdiction it pursues its taxable activities, business or is a registrant; or before the Commissionerate having authority over the provider of the service. That would be a matter of a legitimate choice for a claimant of refund. In this case, the appellant had initially filed a claim before the Delhi Commissionerate which rejected the same on the ground that it had no jurisdiction since the appellant was pursuing business outside its jurisdiction. The Bilaspur Commissionerate also rejected the refund claim on the ground that the provider of the service is not within its jurisdiction. The rejection by both Commissionerates is in my view unsustainable.
7. Since the appellant is the recipient of the service it is entitled to file a refund claim. Since the impugned order rejects the claim arbitrarily on the point of jurisdiction, a case is prima-facie made out for award of costs. However, the ld. DR has fairly conceded the position that the appellant is entitled to refund in totality the circumstances since the claim is found to be within the period of limitation and the appellant initially filed its refund claim before the Delhi Commissionerate and subsequently before the Bilaspur Commissionerate as well.
8. In view of the concession fairly and gracefully made and on the aforesaid analyses, the appeal is allowed. The appellant is entitled to refund as claimed with consequential benefits, if any, in accordance with law. No costs.
9. Further I also find that in an identical case, the Honble Allahabad High Court in the case of Indian Farmers and Fertilizers (supra) have dismissed the Revenue appeal holding that recipient of the services can file the refund application claiming refund of excess service tax paid. The judgment of Honble Supreme Court in the case of Oswal Chemicals (supra) relied on by the Ld. DR is not applicable to the facts and circumstances of the present case, inasmuch as, whether the buyer can file the refund application before its jurisdictional statutory authorities was not the issue decided by the Honble Supreme Court in the said decided case.
10. In view of the foregoing, I do not find any merits in the impugned order, and thus, the appeal filed by the appellant is allowed with consequential relief.
(Dictated and pronounced in open court) (S. K. Mohanty) Member(Judicial) Neha 6 | Page ST/1629/2011-ST(SM)