Custom, Excise & Service Tax Tribunal
S K Sarawagi Co Pvt Ltd vs Kolkata South on 6 January, 2020
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH : KOLKATA
REGIONAL BENCH - COURT NO.2
Service Tax Appeal No.76290 of 2018
(Arising out of Order-in-Appeal No.19/S.Tax-II/Kol/2018 dated 31.01.2018 passed
by Commissioner of CGST & CX, (Appeal-I), Kolkata.)
M/s. S.K. Sarawagi & Co. Private Limited
(1, Sarojini Naidu Sarani, 5th Floor, Kolkata-700001.)
...Appellant
VERSUS
Commissioner of CGST & CX, Kolkata South Commissionerate
.....Respondent
(180, Shantipally, Rajdanga Main Road, Kolkata-700107.) APPEARANCE Shri L.Samtani, Chartered Accountant for the Appellant (s) Shri K.Chowdhury, Authorized Representative for the Respondent (s) CORAM: HON'BLE SHRI P.K.CHOUDHARY, MEMBER(JUDICIAL) FINAL ORDER NO. 75018/2020 DATE OF HEARING : 15 July 2019 DATE OF DECISION : 06 January 2020 P.K.CHOUDHARY :
The instant appeal has been filed by the assessee, M/s S K Sarawagi & Co. Pvt Ltd., against the Oder-in-Appeal dated 31.01.2018 passed in appeal filed against Original Order dated 11.04.2016 whereby the assessee is aggrieved by the rejection of refund claim of Rs. 3,55,224/-.
2. Briefly stated the facts of the case are that the appellant had filed a refund claim in terms of Notification No 41/2007-ST dated 06.10.2007 as amended by Notification No 3/2008-ST dated 19.02.2008 for the rebate of service tax on specified services received and used by them for export of iron ore fines during the quarter ended 2 Service Tax Appeal No.76290 of 2018 March 2008. Vide the impugned appellate order, the authority while rejecting the claim observed that in terms of conditions (iii) of Sl. No 11 of the schedule to the Notification no 41/2007 dated 06.10.2007, as amended by Notification 03/2008 dated 19.02.2008, requires that for claiming refund of taxable services of GTA under section 65(105)(zzp) of the Finance Act, the details of the exporters invoice relating to exported goods has to be specifically mentioned in the lorry receipts. None of the Challan/bill /LR submitted by the claimant contains the reference of the export invoice as stipulated in the Notification. He observed that conditions specified in the Notification must be strictly complied with for availing the benefits.
3. Shri L.Samtani, learned Chartered Accountant appeared for the appellant and Shri K.Chowdhury, learned Authorized Representative appeared for the Revenue
4. The learned Chartered Accountant appearing on behalf of the appellant argued that in case of bulk cargo the goods are to be aggregated at the port premises even before the shipping documents are prepared. The export invoices are prepared only after the iron ore fines are loaded on to the vessel as the contractual terms and conditions factors in quality, size, etc which are variable. He strongly relied on the decision of the Tribunal in the case of Jumbo Mining Ltd. vs. CCE 2012 (26) STR 525 (Tri-Bang) wherein it was held that compliance of condition No. 11 of Notification No. 3/2008 dated 19.02.2008 should be ascertained by broadly correlating the evidence of transport and service tax paid on such transport charges and quantity exported. He further relied on the decision of the Tribunal in East India Minerals Limited vs. CCE & ST 2012 (27) STR 18 wherein it was held that the policy of the government is not to export domestic tax along with export of such goods. It was also contended that the Chartered Accountant's certificate broadly correlating the quantity 3 Service Tax Appeal No.76290 of 2018 exported and the quantity transported along with bill and challans is on record.
5. The learned Authorized Representative reiterated the findings of the learned Commissioner (Appeals). He brought to my notice the decision of the Hon'ble Telangana & Andhra Pradesh High Court in Principal Commissioner of S.T. vs. R.R. Global Enterprises Pvt. Ltd., 2016 (45) STR 5 (AP) and submitted that the case already stands covered in favour of the Revenue and therefore the instant appeal filed by the assessee has no merit and is liable to be rejected.
6. Heard both sides and perused the appeal records.
7. In the present appeal, the appellant is aggrieved by the rejection of refund of Rs.3,55,224/-. The undisputed facts of the case are that the conditions for claiming refund on GTA services as prescribed in the Notification No. 41/2007 dated 06.10.2007 as amended by Notification No. 03/2008 dated 03.02.2008 have not been complied with as the details of the exporters invoice relating to export goods are not mentioned in the lorry receipt and the corresponding shipping bill which is the mandatory condition in terms of the notification.
8. The issue involved in these proceedings is whether appellant is eligible to refund of services availed in relation to export of goods under Notification No. 41/2007-S.T., dated 6-10-2007. As per Notification No. 41/2007-S.T. certain co-relations are required to be made before sanctioning the refund claims. It is observed from C.B.E. & C. Circular No. 120/01/2010-S.T., dated 19-1-2010 that exporters were facing certain difficulties in relation to one to one co-relation between input services and the exports made. The learned Chartered Accountant brings to the notice of the Bench para 3.2.1 of C.B.E. & C. Circular dated 19-1-2010 to argue that self-certification of the exporter or a Chartered Accountant if given is sufficient to sanction refund. In para 6.2 of this Circular, C.B.E. & C. has clarified that only a 4 Service Tax Appeal No.76290 of 2018 broad co-relation of input services and Service Tax paid is required to be made with respect to exports. This Circular was relied upon by the appellant before the Adjudicating Authority, as mentioned in submissions of the assessee. At the same time learned Authorized Representative appearing on behalf of the respondent Revenue could not produce the required documents before the Bench to ascertain as to what extent co-relation can be made and whether any liberal view can be taken in these proceedings in view of C.B.E. & C. Circular No. 120/01/2010-S.T., dated 19-1-2010.
9. So far as admissibility of Service tax paid on GTA Services is concerned, it is observed that similar refunds were allowed by CESTAT in the case of Jumbo Mining Ltd. v. CCE Hyderabad (supra) by making following observations in Para 6.2 as follows :-
"6.2 It is not disputed that the exported goods are transported from the appellant's factory to kakkinada Port directly. In view of the peculiar nature of the goods. The entire consignments convered by one Shipping Bill cannot be transported by a single lorry, as an export consignment is in the order of 6000 to 8000 tonnes. Therefore, it requires to be aggregated at the Port premises before the shipping documents are prepared. The fact of exports is not being disputed. It cannot be the case that the goods are exported from Kakkinada Port without being transported from the factory of the appellants as claimed by them. Therefore, in the peculiar facts and circumstances of the case, the compliance of condition No. (iii) should be ascertained by broadly correlating the evidence relating to transport and service tax paid on such transport charges and the quantity exported. As regards the decisions, of the Tribunal relied upon by the appellant ignoring procedural violation while granting refund in respect of exports can be applied to the facts of present case as well.
7. In view of the above, the orders of the authorities below are set aside insofar as the same relating to denial of refunds to the extent mentioned above and the matter remanded to the original authority 5 Service Tax Appeal No.76290 of 2018 for fresh consideration after granting reasonable opportunity of hearing the appellants."
10. C.B.E. & C. in Para 3.2.1 of Circular No. 120/01/2010-S.T., dated 19-1-2010 also clarified as follows on the issue :-
"3.2.1. Similar problem of co-relation and scrutiny of large number of documents was being faced in another scheme (Notification No. 41/2007-S.T., dated 6-10-2007) which grants refund of service tax paid on services used by an exporter after the goods have been removed from the factory. In Budget 2009, the scheme was simplified by making a provision of self-certification [Notification No. 17/2009- S.T.] whereunder an exporter or his Chartered Accountant is required to certify the invoices about the co-relation and the nexus between the inputs/input services and the exports. The exporters are also advised to provide a duly certified list of invoices. The departmental officers are only required to make a basic scrutiny of the documents and, if found in order, sanction the refund within one month. The reports from the field show that this has improved the process of grant of refund considerably. It has, therefore, been decided that similar scheme should be followed for refund of CENVAT credit under Notification No. 5/2006-C.E. (N.T.). The procedure prescribed herein should be followed in all cases including the pending claims with immediate effect."
11. Though the above clarification was with respect to Notification No. 5/2006-C.E. (N.T.) but it clearly conveys that in budget 2009 the scheme under Notification No. 41/2007-S.T. was simplified in Notification No. 17/2009-S.T. by providing self certification or Chartered Accountant's certification about co-relation and nexus between input Services & the exports. That above logic can be followed for Notification No. 5/2006-C.E. (N.T.) where such simplification of Notification No. 17/2009-S.T. may not be available.
6Service Tax Appeal No.76290 of 2018 In view of the above discussions, the impugned order cannot be sustained and is accordingly set aside. The Order-in-Original dated 11.04.2016 is restored. The appeal filed by the appellant is allowed with consequential benefits.
(Order pronounced in the open court on 06 January 2020.) SD/ (P.K.CHOUDHARY) MEMBER (JUDICIAL) sm