Custom, Excise & Service Tax Tribunal
M/S. Indian Oil Corporation Ltd vs The Commissioner Of C. Exicse, Mumbai on 4 May, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. ST/600,601/11 [Arising out of Order-in- Appeal No. YDB/64-64/M-I/2011 dated 18/8/2011 passed by the Commissioner(Appeals), Central Excise, Mumbai Zone-I] For approval and signature: Honble Mr Ramesh Nair, Member(Judicial) Honble Mr. C.J. Mathew, Member(Technical) =======================================================
1. Whether Press Reporters may be allowed to see : No
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 : seen
of the Order?
4. Whether Order is to be circulated to the Departmental: Yes
authorities?
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M/s. Indian Oil Corporation Ltd
:
Appellant
VS
The Commissioner of C. Exicse, Mumbai
:
Respondent
Appearance
Shri. M.H. Patil, Advocate with Ms. Padmavati Patil, Advocate for the Appellants Shri. S.L. Karoliya, Asstt. Commissioner(A.R.) for the Respondent CORAM:
Honble Mr Ramesh Nair, Member(Judicial) Honble Mr. C.J. Mathew, Member(Technical) Date of hearing: 4/5/2016 Date of decision: /2016 ORDER NO.
Per : Ramesh Nair The issue involved in the instant case is as to whether two Refund claims (Rs. 99,68,511 & Rs. 2,32,13,600 respectively) filed on 27/7/2010 (for the period 7/7/2009 to September 2009) and filed on 23/9/2010(for the period October 2009 to March 2010) of Service tax paid on Througput Charges by Mumbai International Airports Authority, under Notification No. 17/2009-ST dated 7/7/2009 is admissible under Sr. No. 18 under Airport Services, which services were used for supply of ATF to foreign aircrafts which is treated as export, in a case where on the date of filing the Refund Claims the said entry at Sr. No. 18 (Airport Service) of Notification No. 17/2009-ST was inserted vide Notification No. 37/2010-ST dated 28/6/2010. The adjudicating authority rejected the refund of Rs. 99,68,511/- vide Order-in-Original No. K-I/107-REF/2010-II dated 25/1/2011 and refund of Rs. 2,32,13,600/- vide Order-in-Original No. K-I/108-R/2010-II/dated 27/1/2011 on the ground that appellant have received the Airport Services which is not covered under Notification No. 17/2009-ST dated 7/7/2009 therefore the refund is not admissible. Aggrieved by both the orders-in-original the appellant filed appeals before the Commissioner(Appeals) which came to be rejected, therefore appellant is before us.
3. Shri. M.H. Patil, Ld. Counsel with Ms. Padmavati Patil, Advocate appearing on behalf of the appellant submits that appellant supply Aviation Turbine Fuel(ATF) to foreign going aircrafts which amounts to exports of goods. M/s. Mumbai International Airports Pvt Ltd (in short MIAL) facilitates the appellants to supply ATF to the aircrafts and for this purpose MIAL charges Throughput charges to the appellants plus service tax thereon paid under Airport Services. He submits that Airport Service was received by the appellant during the period July, 2009 to September, 2009 and October, 2009 to March, 2010. In the Notification No.17/2009-ST dated 7/7/2009 amendment was made vide Notification No. 37/2010-ST dated 28/6/2010 whereby Sr. No. 18 was inserted in the main notification providing for refund of service tax paid under Airport Services falling under Section 65(105)(zzm) of the Finance Act, 1994 in respect of service provided by airports authority or any other person in any airport in respect of the export of goods. The refund claims were rejected on the ground that Airport services were not notified at the time of export of the goods under Notification No. 17/2009-ST during the period July, 2009 to September, 2009. He submits that refund claims were filed on 27/7/2010 and 23/9/2010 at the same time the amended notification was in enforce. According to which the refund of service tax paid on Airport service was admissible. He referred to the Board Circular No. 354/256/2009-TRU dated 1/1/2010 which clarifies that Notification No. 17/2009-ST dated 7/7/2009 does not bar its applicability to exports that have taken place prior to its issuance. He further submits that notification allowing refund on service tax paid in respect of export was issued with sole objective of removing burden of service tax from the exports goods and the policy of the government is not to export domestic tax alogwith exports goods. He placed reliance on following clarifications/judgments:-
(a) CBEC Circular No. 112/6/2009-ST dated 12/3/2009
(b) CBEC Circular No. 334/3/2010-TRU dated 1/7/2010
(c) Fomento (Karnataka) Mining Co. pvt ltd Vs. Commissioner [2014-TIOL-1402-CESTAT-MUM]
(d) Fazlani Exports Pvt Ltd. Vs. Commissioner [2015-TIOL-1088-CESTAT-MUM]
(e) East India Minerals Ltd Vs. Commissioner[2012(27) STR 18(T)]
(f) WNS Global Services (P) Ltd Vs. Commissioner[2008(10) STR 273(T)] upheld by Bombay High Court [2011(22) STR 609(Bom)]
(g) AIA Engineering Pvt Ltd. Vs. Commissioner[2012(36)STR 1236(Guj)}
(h) Adani Enterprises Ltd Vs. Commissioner[2014(35) STR 741(Guj)] He submits that Commissioner(Appeals) has not given any findings in respect of Original authoritys findings on time bar in respect of refund claim for the period 7/7/2009 to 27/7/2009 which shows that submission of the appellant in respect of time bar has been accepted by the Commissioner(Appeals). He further submits that in any case claim would not be barred as MIAL raised its bill for the services provided by them on monthly basis. In other word, MIAL raised its bill for the period 1/7/2009 to 31/7/2009 on 10/8/2009 and only on receiving the bill from MIAL that the appellants could pay service tax on the disputed service for claim under Notification No. 17/2009-ST dated 7/7/2009 as per the condition (c) of the proviso in para 1 of the Notification, the exporter has to pay service tax on specified service to the provider, although exports took place during the period July, 2009 for claiming refund, the aforesaid condition (c) of the proviso to para 1 of the Notification could be fulfilled by the appellants only after the receipt of the invoice of MIAL, which was raised by MIAL on 10/8/2009 and appellant could pay service tax to MIAL only after receipt of the invoice. Therefore the period of one year for filing refund was wrongly taken from the date of services received whereas it should be taken only from the date of payment of service tax by the appellant to MIAL therefore refund is not time bar. In this regard Ld. Counsel placed reliance on the judgment of Honble Delhi High Court judgment in case of Sony India Pvt ltd[2014(304) ELT 660(Del)].
4. Shri. S.L. Karoliya, Ld. Asstt. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that refund was rightly rejected on the Airport service received by the appellant for the reason that period of refund is from July, 2009 to March 2010 whereas the Airport service was incorporated vide Sr.No. 18 vide notification no. 37/10-ST dated 28/6/2010 therefore the exports made as well as service received during the period when Airport service was not covered under exemption notification No. 17/09-ST therefore refund was clearly inadmissible. He submits that this Tribunal has considered the very same issue in case of Hindustan Petroleum Corpn. Ltd Vs. Commissioner of Service Tax, Mumbai vide Order No. A/3015-3017/15/STB dated 2/9/2015 whereby on the same services received from the same MIAL for the period December, 2009 to May, 2010 refund was rejected on the ground that at the time of exports of the goods and receipt of the services, Airport service was not eligible for the refund under notification No. 17/2009-ST therefore issue is no more res-integra.
5. We have carefully considered the submissions made by both sides and perused the records.
6. The fact is not much under dispute that the ATF was supplied which was treated as exports during the period July, 2009 to March, 2010 and the Airport services which is input service was received by the appellant during the same period. The Airport service was not covered under exemption notification no. 17/2009-ST dated 7/7/2009. It is important to note that this Notification exempt the services specified in the notification by way of refund. Therefore the exemption is available in the hands of the recipient. However, service provider in the present case is MIAL suppose to discharge the service tax. Therefore point of time of exemption under notification No. 17/2009-ST is time when services were received and used in export of the goods. In the present case receipt of the service as well as use in the exports of goods have taken place during the July, 2009 to March, 2010, at that material time there was no exemption provided to Airport service under notification no. 17/2009-ST, the exemption was made applicable to the airport service under notification no. 17/2009-ST only by amending notification no. 37/2010-ST w.e.f. 28/6/2010 i.e. much after the period of refund in the present case of the appellant. Therefore it is clear that exemption to Airport service by way of refund was not available during the period July, 2009 to March, 2010. This issue is no more res-ingegra as this tribunal in case of Hindustan Petroleum Corporation Ltd(supra) decided the very same issue vide order No. A/3015-3017/15/STB dated 2/9/2015 wherein this tribunal passed following order:
6. On consideration of the submissions made by both the sides, we find that the appellant is claiming of the service tax paid on the services rendered by MIAPL to the appellant during the period December 2009 to May 2010 for fueling aircrafts by ATF. It is undisputed that the appellant has loaded the ATF in aircrafts which were on foreign trips. We find that the service tax paid on any service rendered by export of goods were eligible for the refund from the authorities. The said refund was extended by Notification 17/2009-ST. On perusal of the said Notification we find that the services which were considered by the Notification for refund of the service tax paid were as per the provisions of Section 65(105) and the said classifications were sub-clause (zn) and the payment of service tax on the services only known as terminal handling charges. The services rendered by MIAPL will not fall under any of the two categories as the service tax discharged by MIAPL is under Section 65(105)(zzm). The service tax paid under the category of services provided by Airport authority under Section 65(105)(zzm) were inserted in Notification 17/2009-ST by Notification 37/2010-ST dated 28.06.2010. The arguments of the learned Counsel is that this notification should be read as being effective in the Notification 17/2009-ST from the date it was issued is not acceptable. Notification 17/2009-ST specifically grants refund of tax paid on services provided under the category as per classification as mentioned therein. The service tax paid by MIAPL is under the category which was not classified under Notification 17/2009-ST as it existed during the period when the services were received by the appellant for fueling the aircrafts which are on foreign. In view of the above, we hold that both the lower authorities were correct in rejecting the refund claim filed by the appellant. We do not find any infirmity in the impugned order passed by the lower authorities.
7. Appeals filed by the appellants are devoid of merits and are rejected.
From the above decision of this Tribunal it can be seen that period involved is more or less the same and issue is also identical.
As regard the issue of time bar in respect of the refund pertaining to the period 7/7/2009 to 27/7/2009, we agree with the Ld. Counsel that as per condition (c) of para (1) of the Notification No. 17/09-ST, one of the important condition is that payment of service tax should be made by the service recipient, therefore before complying this condition refund does not arise. Therefore following the ratio of the judgments in case of Sony India Pvt Ltd(supra) we are of the view that period of one year should be reckoned from the date of payment of service tax by the service recipient to the service provider. In the present case for services pertaining to the period 7/7/2009 to 27/7/2009 the service provider MIAL raised bills itself on 10/8/2009 therefore it is obvious that payment for said period was made after raising bill by MIAL. For this period refund claim was filed on 27/7/2010 which is well within the one year therefore refund is not time bar. As regard reliance of the Ld. Counsel on the Board circular, the same is not dealing with the issue in hand. It does not deal with the issue that even if the input service is not specified in the notification refund can be granted therefore circular will not apply in the facts of the present case. All the judgments relied upon by the Ld. Counsel also do not apply for the same reason. As per our above discussion and settled legal position on the issue in case of Hindustan Petroleum Corporation Pvt Ltd(supra), we are of the considered view that lower authorities have rightly rejected the refund claim on the Airport service. The impugned order is upheld and appeals are dismissed.
(Order pronounced in court on _____________) C.J. Mathew Member (Technical) Ramesh Nair Member (Judicial) sk 10 ST/600,601/11