Custom, Excise & Service Tax Tribunal
Suguna Foods Ltd Aahirini Unit vs Service Tax-I, Kolkata on 1 August, 2025
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EASTERN ZONAL BENCH : KOLKATA
REGIONAL BENCH - COURT NO. 1
Service Tax Appeal No. 76760 of 2016
(Arising out of Order-in-Appeal No. 149/ST-I/KOL/2016 dated 29.06.2016 passed by
the Commissioner of Central Excise(Appeal-I), Kolkata 169, A. J. C. Bose Road,
Bamboo Villa (4th Floor), Kolkata 700 014)
M/s. Suguna Foods Ltd., Aahirini Unit : Appellant
301, Action Area-I New Town,
Rajarhat, Kolkata-700156
VERSUS
Commissioner of Service Tax-I, Kolkata : Respondent
North Division, Service Tax-I Commissionerate
180, Santi Pally, Rajdanga Main Road,
Kolkata-700107
APPEARANCE:
Shri Deepro Sen, Advocate
MS. Taniya Roy, Advocate for the Appellant
Shri P. Das, Authorized Representative for the Respondent
CORAM:
HON'BLE SHRI ASHOK JINDAL, MEMBER (JUDICIAL)
HON'BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL)
FINAL ORDER NO.77169/2025
DATE OF HEARING / DECISION: 01.08.2025
Order: [PER SHRI ASHOK JINDAL]
The appellant is in appeal against the
impugned order.
2. The facts of the case are as under: -
1. The Appellant is engaged in the business of
maintaining a poultry farm and sale of broiler
chicken, value added eggs and frozen chicken.
The fully integrated operations of the Appellant
cover broiler and layer farming, hatcheries, feed
mills, processing plants, vaccines and exports.
For the purpose of captive production of poultry
feed, the Appellant has a Soya oil extraction
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Appeal No.: ST/76760/2016-DB
plant. The Appellant has obtained a registration
for discharging service tax under the category
of 'Transport of Goods by Road Agency Service'
and discharges tax under Rule 2(1)(d) of the
Service Tax Rules, 1994, as recipient of service
towards transportation of goods by road.
2. The Appellant paid freight towards
transportation of "de-oiled cakes" done by
various goods transport agencies, appointed by
the Appellant against invoices raised on the
Appellant for the same. The de-oiled cakes are
used by the Appellant for the purpose of feeding
the poultry and are not sold to any independent
buyers.
3. During the period from April 2013 to March
2014, the Appellant paid Rs. 1,62,78,610/-
towards transportation charges of such de-oiled
cakes and accordingly paid Rs. 5,03,009/-
towards service tax. However, after paying the
service tax amounting to Rs. 5,03,009/-, the
Appellant realized that no service tax was
payable in respect of transportation of oiled
cakes as per Notification No. 25/2012-S.T.
dated 20.06.2012 as amended by Notification
3/2013-S.T. dated 01.03.2013.
4. Accordingly, the Appellant filed a claim for
refund of the said amount on 28.03.2014 before
the Ld. Assistant Commissioner of Central
Excise. The refund application in Form-R was
accompanied by copies of e-receipts of service
tax payments, copy of the relevant notification
viz. Notification No. 3/2013-S.T. under which
refund would be admissible, copy of power of
attorney, returns in Form ST-3, statement for
service tax paid on de-oiled cakes, copies of
bills issued by transporter and a certificate of
non-availment of credit. A Show Cause Notice
bearing No. V(18)53/Refund/ST/D-
II/Kol/2014/2892 dated 16.05.2014 was issued
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Appeal No.: ST/76760/2016-DB
proposing to deny the refund on the following
grounds:
Technical grounds:
copies of bills of transporter have not
been certified by the assessee
certified copy of Board Resolution
regarding Authorized Signatory have not
been submitted
Original copies of bills of transporter
have not been submitted
Copy of ST-2 has not been submitted
Auditor's Certificate regarding Unjust
Enrichment not submitted
On Merits:
The Exemption Notification 25/2012-S.T.
vide Sl. No. 20(j) exempts 'chemical
fertilizers and oilcakes' but not 'de-oiled
cakes', hence the exemption is not
allowed.
5. The Appellant vide its letter dated 28.07.2014
replied to the SCN stating that the impugned
goods termed as de oiled cakes are nothing but
oil cakes and are entitled to exemption under
Notification No. 25/2012-S.T. as amended by
Notification No. 3/2013-S.T. Further, the
Appellant also submitted the relevant
documents including the CA Certificate
certifying that the incidence of tax had not been
passed on to any other person.
6. Thereafter, the Ld. Assistant Commissioner vide
the OIO No. 36/Refund/ST-I/North Div/Kol/15-
16 dated 12.05.2016 acknowledged the receipt
of documents sought for in the SCN, however
rejected the refund claim of the Appellant on
the sole ground of non-submission of
consignment notes, despite the fact that the
said document was not sought for vide the SCN.
7. Being aggrieved by the OIO, the Appellant filed
an appeal before the Ld. Commissioner
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Appeal No.: ST/76760/2016-DB
(Appeals) inter alia stating that the underlying
OIO had travelled beyond the scope of SCN and
denied the refund to the Appellant on new
ground. Although the Ld. Commissioner
(Appeals) held that the de-oiled cakes are the
same as oil cakes, however, denied the refund
claim vide the impugned order dated
29.06.2016 on the grounds that:
the Appellant claimed exemption under
Sl. No. 20(h), 21(a) and 21(c) of the said
Notification in their ST-3 returns.
However, de-oiled cakes fall under Sl. No.
20(j). Additionally, it cannot be
ascertained if the Appellant claimed
exemption for the amount paid by them
to the transporter in the return, thereby
leading to a double claim.
the goods were transported to certain
premises of the Appellant which were not
covered under the Appellant's service tax
registration certificate.
from the relevant bills, challans and ST-3
return, it cannot be separately
determined that the amount of Rs.
5,03,009/- claimed as refund was paid
towards transportation of de-oiled cakes.
the transport related documents
submitted by Appellant bear the date
14.01.2014, however, the refund is
claimed for the period April 2013 to
September 2013.
8. Being aggrieved by such order, the Appellant
has filed the present appeal."
3. The Ld. Counsel appearing on behalf of the
appellant has made the following submissions: -
A.1 The Appellant submits that the only legal ground
on which the underlying SCN proposed to deny the
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Appeal No.: ST/76760/2016-DB
refund was that the de-oiled cakes are not covered
under the Exemption Notification. However, the
underlying OIO had traversed beyond the scope of
the SCN to deny the refund on the sole ground of
non-submission of consignment notes, which was
not sought for in the SCN. Although the said ground
was taken in the appeal preferred before the Ld.
Appellate Authority, still no finding was given against
the said ground of appeal while passing the
impugned order.
A.2 It is submitted that on the one hand the
underlying OIO records that all the documents
sought for in the SCN from the Appellant have been
duly submitted, however, on the other hand the Ld.
adjudicating authority denied the refund basis a new
ground. Further, the underlying OIO had not taken
any view regarding the eligibility of exemption under
the Exemption Notification and merely denied the
refund basis a technical ground not raised earlier in
the SCN.
A.3 The Appellant submits that despite making
preliminary submissions on the underlying OIO being
passed beyond the scope of SCN, no finding was
given in the impugned order and the Ld.
Commissioner (Appeals) has proceeded to pass the
impugned order on entirely new grounds without
addressing any of the submissions preferred by the
Appellant.
A.4 Further, it is to be noted that the impugned order
has rejected the refund on the following grounds:
(a) the Appellant claimed exemption under
Sl. No. 20(h), 21(a) and 21(c) of the
said Notification in their ST-3 returns.
However, de-oiled cakes fall under Sl.
No. 20(j). Additionally, it cannot be
ascertained if the Appellant claimed
exemption for the amount paid by them
to the transporter in the return, thereby
leading to a double claim.
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Appeal No.: ST/76760/2016-DB
(b) the goods were transported to certain
premises of the Appellant which were not
covered under the Appellant's service tax
registration certificate.
(c) from the relevant bills, challans and ST-3
return, it cannot be separately
determined that the amount of Rs.
5,03,009/- claimed as refund was paid
towards transportation of de-oiled cakes.
(d) the transport related documents
submitted by Appellant bear the date
14.01.2014, however, the refund is
claimed for the period April 2013 to
September 2013.
A.5 In this regard, it is submitted that the underlying
SCN never alleged any of the afore-mentioned
grounds. Further, the only issue raised on merits
pertained to the claim of eligibility of exemption on
the ground that the Mega Exemption Notification
only exempts 'chemical fertilizers and oilcakes' but
not 'de-oiled cakes'. As a matter of fact, the
impugned order vide para 6 [Pg 19 of the
Memorandum of Appeal] has already held that there
is no difference between de-oiled cakes and oiled
cakes. Thus, the Appellant fails to understand the
logic behind denying the refund by passing the
impugned order. On one hand, the Ld.
Commissioner (A) has agreed that the Appellant is
eligible to claim exemption under the Notification,
however, still the impugned order has gone beyond
the scope of SCN to deny the refund.
A.6 Point-wise rebuttal of the grounds for rejection of
refund in the impugned order is as under:
Grounds of Specific Rebuttal
rejection
a. The Appellant It is solely for the reason
claimed exemption that the Appellant did not
under Sl. No. 20(h), claim exemption in its
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Appeal No.: ST/76760/2016-DB
21(a) and 21(c) of ST-3 returns that the
the said Notification service tax has been
in their ST-3 returns. erroneously paid and the
However, exemption same is being claimed as
on transportation of refund vide the
de-oiled cakes falls underlying refund
under Sl. No. 20(j). application. Further, the
Additionally, it cannot Appellant cannot be
be ascertained if the asked to prove the
Appellant claimed negative. All the relevant
exemption for the documents evidencing
amount paid by them the amount of service tax
to the transporter in being paid on the subject
the return, thereby services, were already
leading to a double submitted with the Form-
claim. R.
b. The goods were The said notification
transported to certain provides exemption for
premises of the transportation of oil
Appellant which were cakes from one place in
not covered under India to another place in
the Appellant's India, there is no
service tax requirement that the
registration transportation should be
certificate from one registered
premise to another
registered premise. The
documents on record
prove the procurement of
transportation services.
c. From the relevant Form-R is accompanied
bills, challans and ST- by a Statement showing
3 return, it cannot be service tax paid on de-
separately oiled cakes. It is evident
determined that the from the said document
amount of Rs. that the disputed refund
5,03,009/- claimed amount of Rs. 5,03,009/-
as refund was paid was paid as service tax
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Appeal No.: ST/76760/2016-DB
towards towards transportation of
transportation of de- de-oiled cakes. Thus, the
oiled cakes finding of the Ld.
Commissioner (A) is
wholly erroneous and
factually incorrect.
d. The transport related The impugned order
documents submitted wrongly mentions that
by Appellant bear the the period for which
date 14.01.2014, refund was claimed
however, the refund pertained to April 2013 to
is claimed for the September 2013,
period April 2013 to however, the claim for
September 2013. refund was made for the
period April 2013 to
March 2014, therefore,
the transport documents
bearing the date
14.01.2014 pertain to the
underlying period itself.
Thus, this finding of the
impugned order is
factually incorrect.
.
A.7 Further, it is submitted that once it is not disputed that the Appellant has actually paid service tax on the services availed by them for transportation of de-oiled cakes, the department cannot deny the refund on new procedural grounds, which did not form part of the SCN. It is a settled law that the substantive benefits cannot be denied on procedural issues.
A.8 Basis the foregoing submissions, it is hereby submitted that the findings of the impugned order, apart from being factually incorrect and arbitrary, are also beyond the scope of SCN.
A.9 It is a settled principle of law that show cause notice is the foundation on which the Department builds its case and adjudication beyond the show Page 9 of 13 Appeal No.: ST/76760/2016-DB cause notice is not sustainable in law. It has been held in a number of decisions that when an order goes beyond the allegations mentioned in the SCN, such order is violative of the principles of natural justice. Reliance in this regard is placed on the following judgments:
M/s Tata Steel Utilities & Infrastructure Services Ltd. v. Commissioner of Central Excise and Service Tax Outer Circle Road, Bistupur, 2025 (4) TMI 1187- CESTAT Kolkata M/s D.D. International Corporation v. Commissioner of Customs, Kolkata, 2025 (3) TMI 345- CESTAT Kolkata M/s P.K. Agarwalla v. Commissioner of Central Excise & Service Tax, Kolkata, 2024 (8) TMI 716- CESTAT Kolkata Inox Leisure Ltd. v. Commissioner of Service Tax, Hyderabad - 2022 (60) G.S.T.L. 326 (Tri. - Hyd.) which was affirmed by the Hon'ble Supreme Court in 2022 (61) G.S.T.L. 342 (S.C.) R. Ramdas v. Joint CCE, Puduchchery - 2021 (44) G.S.T.L. 258 (Mad.) CCE & ST, Belgaum v. Swarnagiri Wire Insulations Pvt. Ltd. - 2014 (301) E.L.T. 46 (Kar.) Commissioner of C. Ex., Nagpur v. Ballarpur Industries Ltd., 2007 (215) E.L.T. 489 (SC) A.10 Thus, the Appellant submits that the impugned order is liable to be set aside.
B. THE APPELLANT HAS SATISFIED ALL THE CONDITIONS FOR CLAIMING REFUND OF THE AMOUNT THAT HAS BEEN PAID INADVERTENTLY.
B.1 The Appellant transports the de oiled cakes from their oil extraction plant for use as poultry feed and erroneously discharged service tax on the same under reverse charge mechanism due to lack of knowledge of the exemption under Notification No. 25/2012-ST dated 20.06.2012 as amended vide Page 10 of 13 Appeal No.: ST/76760/2016-DB Notification No. 03/2013-ST dated 01.03.2013 which specifically provides that tax would not be liable to be paid on the same.
B.2 It is submitted that oil cakes and de-oiled cakes are synonymous and refer to the residues remaining after the extraction of oil from the soya beans. B.3 The Appellant attached the required relevant documents and enclosed copies of the invoices issued by the transporters and the challans evidencing payment of service tax on the GTA services under the reverse charge basis. It is an undisputed fact that service tax has been paid on the transportation services.
B.4 The Appellant has fulfilled all the conditions for filing the refund claim viz. eligibility to exemption, depositing the tax with the government, incidence of tax not been passed on and filing of refund claim within the time limit, as per Section 11B of the Central Excise Act, 1944.
B.5 The Appellant submits that since all the conditions stand satisfied for claiming refund, the impugned order ought not to have denied the same to the Appellant based on new and frivolous grounds which were not raised by the lower authorities. B.6 In view thereof, the Appellant submits that the impugned order is liable to be set aside.
C. INTEREST IS PAYABLE TO THE APPELLANT FOR DELAYED REFUND.
C.1 Since, the refund claim of the Appellant is not barred by period of limitation, therefore, Appellant is also entitled to receive interest on delayed payment of refund, in accordance with Section 11BB of the Central Excise Act, 1944 read with section 83 of the Finance Act, 1994 inasmuch as amount claimed by the Appellant has not been refunded to the Appellant within the stipulated time period of three months from the date of filing of refund application. C.2 Reliance in this regard is placed on the following:Page 11 of 13
Appeal No.: ST/76760/2016-DB Ranbaxy Laboratories Ltd. v. UOI, 2011 (273) E.L.T. 3 (S.C.) The Commissioner of Central Tax Bengaluru v. Netapp India Pvt. Ltd. -
2019 (3) TMI 1096 - Karnataka High Court C.3 In the instant case, the impugned order has erroneously denied refund claim of the Appellant on technical grounds not raised while issuing the SCN. Since, the refund claim of the Appellant is not barred by period of limitation, therefore, Appellant is entitled to receive interest on delayed payment of refund, in accordance with Section 11BB of the Central Excise Act, 1944 read with section 83 of the Finance Act, 1994.
C.4 Therefore, the Appellant submits that, since the amount claimed has not been refunded to the Appellant within the stipulated time period of three months from the date of filing of refund application, the Appellant is entitled to interest in terms of Section 11BB of the Central Excise Act, 1944 read with section 83 of the Finance Act, 1994."
4. On the other hand, the Ld. Authorized Representative of the Revenue supported the impugned order.
5. Heard the parties and considered their submissions.
6. We find that in this case, the appellant has paid Service Tax on transportation of de-oiled cakes during the from April 2013 to March 2014, under reverse charge mechanism. Later on, it was realized by the appellant that in terms of Notification No. 25/2012-S.T. dated 20.06.2012, as amended by Notification No. 03/2013-S.T. dated 01.03.2013, the appellant is not liable to pay Service Tax for transportation of de-oiled cakes as the same had Page 12 of 13 Appeal No.: ST/76760/2016-DB been used by the appellant for the purpose of feeding poultry and not sold to independent buyers. Accordingly, the appellant filed a refund claim.
7. However, the refund claim filed by the appellant was rejected on the ground that the appellant had not submitted the consignment notes.
8. We find that it is the submission of the appellant that they had submitted all the requisite documents, but their refund claim has been rejected on a new ground. In fact, we observe that while issuing the Show Cause Notice, the following documents were asked from the appellant:
1. Copies of Bills of the Transporter have not been certified by the said assessee.
2 Certified copy of Boards Resolution regarding Authorized Signatory have not been submitted.
3. Original copy of bills of the Transporter have not been submitted.
4. Copy of ST-2 has not been submitted. Copy
5. Auditor's Certificate regarding "Unjust Enrichment" has not been submitted.
9. Further, in the Show Cause Notice, it has been alleged that the exemption under Notification No. 25/2012-S.T. dated 20.06.2012 is available to chemical fertilizers and oil cakes but not de-oiled cakes. However, the ld. adjudicating authority observing that the appellant had submitted bill and seven road challans which were not consignment notes, held that the said documents were not admissible documents in order to entertain the refund claim. Further, we take note of the fact that no finding has been recorded by the ld. adjudicating Page 13 of 13 Appeal No.: ST/76760/2016-DB authority as to whether 'oiled cake' and 'de-oiled cake' are one and the same or not.
10. Thus, in the Show Cause Notice, consignment notes were not asked from the appellant, to be submitted and the rejection of refund claim is only on the ground that consignment notes had not been submitted by the appellant, which is a new ground, to reject the refund claim. It is also observed that on merit, nothing has been denied to the appellant.
11. In these circumstances, we hold that 'oiled cake' and 'de-oiled cake' are one and the same thing and accordingly, the appellant is entitled to the benefit under Sl. No. 20(j) of Notification No. 25/2012-S.T. dated 20.06.2012.
12. Consequently, we hold that the appellant is eligible to claim refund of the Service Tax paid, with consequential relief.
(Operative part of Order was pronounced in Open court) (ASHOK JINDAL) MEMBER (JUDICIAL) (K. ANPAZHAKAN) MEMBER (TECHNICAL) rkp