Custom, Excise & Service Tax Tribunal
Nahar Industrial Enterprises Ltd vs Cce & S.T.- Chandigarh on 12 November, 2014
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI COURT NO. IV Date of Hearing: 16.09.2014 Date of pronouncement: 12/11/2014 Appeal No. ST/536/2012-ST [SM] [Arising out of Order-in-Appeal no. 10/ST/APPL/CHD-II/2010, dt. 18.01.2010 passed by Commissioner (Appeals), Central Excise-Chandigarh II] For approval and Signature: Honble Sh. Manmohan Singh, Member (Technical) 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? Nahar Industrial Enterprises Ltd. Appellant Vs. CCE & S.T.- Chandigarh Respondent
Appearance:
Sh. Rupinder Singh, Advocate-for the Appellant Sh. V.P. Batra, DR-for the Respondent.
Coram:
Honble Sh. Manmohan Singh Final Order No. 54421 /2014 Per: Manmohan Singh The appellant has come in appeal against the Order-in-Appeal No. 10/ST/APPL/CHD-II/2010, dt. 18.01.2010 wherein the Commissioner (Appeals) has rejected their appeal against the order of the Adjudicating Authority where the refund claim under the provisions of Notification No. 17/2009-ST dt. 07.07.2009 was disallowed.
2. The learned counsel of the appellant invited attention to the Notification No. 41/2007-ST dt. 06.10.2007. He specifically invited attention to the Notification where it was specified that the person liable to pay service tax under section 68 of the said Act on the specified service provided to the exporter and used for export of the said goods shall not be eligible to claim exemption from the specified service tax. He requested to allow the credit paid on GTA service which was availed by the respondent under Reverse Charge Mechanism. He referred to Notification No. 17/2009-ST dt. 07.07.2009 where it was provided:-
(a) the exemption shall be claimed by the export for the specified service received and used by him for export of the said goods;
(b) the exemption claimed by the exported shall be provided by way of refund of service tax paid on the specified service used for export of the said goods;
(c) the exporter claiming the exemption has actually paid the service tax on the specified service to its provider;
(d) No CENVAT credit of service tax paid on the specified service used for export of said goods has been taken under the CENVAT Credit Rules, 2004.
3. On the other hand, learned DR contested the pleading made by the counsel of appellant and stated that the respondents themselves have not paid service tax to the provider of the service and instead the respondents have made the payment of service tax involved under section 68 (2) of the Finance Act, 1994. Further, conditions 2 (a) of the said notification No. 17/2009-ST stipulates that the person liable to pay service tax under section 68 of the said Act on the specified service provided to the exporter and used for export of the said goods shall not be eligible to claim exemption for the specified service. As the respondents were liable to pay the said amount of service tax under section 68 (2) of the Act and they accordingly discharged the said liability, they shall not be eligible to claim exemption for specified services in view of the condition 2 (a) of the said Notification.
4. Learned DR accordingly vehemently contested that the said amount of refund claim was not as per proviso (C) para 1 and condition 2 (a) of the Notification No. 17/2009-ST dt. 07.07.2009. Accordingly, the sanction of the said refund claim vide the impugned order was not in accordance with the provisions of the said Notification No. 17/2009-ST and therefore, the sanction of the said amount vide the impugned order was erroneous and correctly set aside. The learned DR requested to uphold Commissioner (Appeals) order.
5. Heard both sides and also gone through the records. Short matter for consideration is whether refund claim filed by the appellant is eligible in view of the fact that service tax liability was not discharged by the appellants.
6. Commissioner (Appeal) has rightly examined the issues in depth.
7. Para 8.1 and 8.2 of his order is self-explanatory and is reproduced for ready reference:
8.1 In the instant appeal, the department have contested the sanctioning of refund claim of Rs. 39,608/- vide impugned order with the argument that the refund claim has been sanctioned to the respondents under Notification No. 41/2007-ST dated 6.10.2007, though the same was filed under Notification No. 17/2009-ST dated 7.7.09 and that proviso (c) to para 1 and condition 2 (a) of the Notification No. 17/2009-ST dated 7.7.09 were not met with. In this regard, it is observed that in para 12 of the impugned order, the adjudicating authority has mentioned that as per Ministrys clarification vide letter F. No. 354/256/2009-ST dated 1.10.10, the scheme prescribed under notification no. 17/2009-ST dated 07.07.09 is applicable even for exports made prior to 7.7.09 subject to the conditions that (a) refund claims are filed within the stipulated period of one year and (b) previously refund claim has not been filed under the previous notification No. 41/2007-ST dated 6.10.07. Further, it is also mentioned that the respondents filed the refund claim within the stipulated period of one year and no refund claim was filed under the previous notification no. 41/2007-ST dated 6.10.07. Therefore, in view of the above Ministrys clarification, the provisions of notification no. 17/2009-ST dated 07.07.09 would be applicable to the instant refund claim of the respondents. As such, the department has rightly contended that the refund claim shall be admissible only if the provisions and conditions of the said notification no. 17/2009-ST are fulfilled.
8.2 The department has further contended that the instant refund claim field by the respondents in respect of service tax of Rs. 39,608/- involved on freight incurred on transportation of export from factory to port of export is not as per proviso (C) to para 1 and condition 2 (a) of the Notification No. 17/2009-ST dated 7.7.09 as the respondents has discharged the liability of the said service tax under section 68 (2) of the Finance Act, 1994. It is observed that as per proviso (c) of para 1 of the said notification, the exemption under the notification provide that the exporter claiming the exemption has actually paid the service tax on the specified service to its provider. In the instant case, the respondents themselves have not paid service tax to the provider of the service and instead the respondents have made the payment of service tax involved under section 68 (2) of the Finance Act, 1994. Further, condition 2 (a) of the said notification no. 17/2009-ST stipulates that the person liable to pay service tax under section 68 of the said Act on the specified service provided to the exporter and used for export of the said goods shall not be eligible to claim exemption for the specified service. As the respondents were liable to pay the said amount of service tax under Section 68 (2) of the Act and they accordingly discharged the said liability, they shall not be eligible to claim exemption for specified services in view of the condition 2(a) of the said notification. Thus, there is strength in the contentions of the department that the said amount of refund claim is not as per proviso (c) to para 1 and condition 2(a) of the Notification no. 17/2009-ST dated 7.7.09. As such, the sanction of the said refund claim vide the impugned order is not in accordance with provisions of the said notification no. 17/2009-ST and therefore, the sanction of the said amount vide the impugned order is erroneous and is set-aside.
8. I agree with the findings of the Commissioner (Appeal) and do not find any ground to interfere in the findings recorded in the Order-in-Appeal. In view of the above, appeal is dismissed.
Pronounced in the Open Court on 12/11/2014.
(Manmohan Singh) Member (Technical) RITU