Custom, Excise & Service Tax Tribunal
Cce, Hyderabad vs M/S. Ravi Foods Ltd on 28 March, 2011
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench Division Bench
Court I
Date of Hearing: 28/03/2011
Date of decision:28/03/2011
Appn. No.E/ST/506/10
Appeal No.E/895/10
(Arising out of Order-in-Appeal No.16/2010(H-IV)CE dt. 10/2/2010 passed by CC,CE&ST(Appeals), Hyderabad)
For approval and signature:
Honble Mr. M.V.Ravindran, Member(Judicial)
Honble Mr. P.Karthikeyan, 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?
No
2.
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
Whether their Lordship wish to see the fair copy of the Order?
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
Yes
CCE, Hyderabad
..Appellant(s)
Vs.
M/s. Ravi Foods Ltd.
..Respondent(s)
Appearance Mr. Ganesh Haavanur, SDR for the Revenue.
Mr. R. Muralidhar, Advocate for the respondent.
Coram:
Honble Mr. M.V.Ravindran, Member(Judicial) Honble Mr. P.Karthikeyan, Member(Technical) FINAL ORDER No._______________________2011 Per M.V.Ravindran This stay petition is filed by the Revenue for staying the operation of the impugned Order-in-Appeal wherein the ld. Commissioner(Appeals) has remanded the matter back to the adjudicating authority to re-consider the issue.
2. After hearing both sides on the stay petition for some time, we find that the appeal itself could be disposed at this juncture and hence, after dismissing the stay petition, we take up the appeal for disposal.
3. The relevant facts that arise for consideration are that the respondent herein filed a refund claim of Rs.32,88,153/- for the quarter April, 2009 to June, 2009 under Rule 5 of Cenvat Credit Rules, 2004 (CCR) read with Notification No.5/2006-CE(NT) dt. 14/3/2006. The adjudicating authority restricted the refund to an amount of Rs.28,50,355/- and did not allow the refund of balance amount on the ground that the assessee had not submitted documents and the proof of export. Aggrieved by such an order, assessee preferred an appeal before the ld. Commissioner(Appeals). After considering the grounds of appeal and submission made before him, the ld. Commissioner(Appeals) has directed the lower authorities to grant a refund as the assessee produced the relevant ARE1 returns, vide which the goods were exported. Hence this appeal.
4. Ld. DR would reiterate the grounds of appeal which are summarized as under:-
a. Ld. Commissioner(Appeals) has erred in sanctioning the refund of Rs.94,860/- relying upon the decision of the Tribunal in the case of Model Buckets & Attachments (P) Ltd. Vs. CCE, Belgaum [2007(217) ELT 264 (Tri. Bang.)] as in this case, there was no proof of export which was submitted before the Department. It is his submission that in the present case, there was only Sworn-Affidavit given by the merchant exporter to record that the goods under the said ARE-1 returns were exported and no other evidence was given. It is his submission that such exports through merchant exporters are not eligible for refund as per para 8.3 of the Boards supplementary instructions. It is his submission that ld. Commissioner(Appeals) has erred in following the ratio of the decision of the Tribunal in the case of CCE Vs. Kanwal Engineers [1996(87) ELT 141 (Tri.)].
b. It is his submission that the ld. Commissioner(Appeals) has erred in applying the provisions of Notification in question without considering the fact that the assessee had submitted photocopies of the shipping bills relating to CT-1 clearances along with refund claim and only given sworn-affidavit. It is his submission that the assessee had not submitted the shipping bill or Bill of Export duly certified by the Customs authorities. The goods were not exported.
c. It is his submission that the ld. Commissioner(Appeals) has erred that there should not be any co-relation between inputs used and goods exported and hence question of restricting the refund to the extent of input services used / consumed during the month / quarter is erroneous. For this proposition, he would read the provisions of Rule 5 of the CCR.
5. Ld. Counsel appearing on behalf of the assessee would submit that the exports were made through merchant exporters. It is his submission that the said merchant exporters had executed a bond and after exports, original ARE-1s and shipping bills were retained by the merchant exporters to settle their bond account with the Department. He would submit that the photocopies of the said ARE-1s and other documentary evidences were produced before the ld. Commissioner(Appeals) and he would draw our attention to such documents and also a letter dt. 05/.02/2010 issued from the office of the CCE, Pune-III indicating that the ARE-1s and shipping bill have been accepted as proof of export. It is his submission that as regards the refund of an amount of Rs.49,510/-, it was pertaining to the service tax credit availed by the appellant and not on inputs and the ld. Commissioner(Appeals) has correctly followed the provisions of condition No.5 of appendix to Notification No.5/2006 which talks about refund of unutilised input service tax credit. It is his submission that the refund was correctly allowed based upon such an appendix.
6. On careful consideration of the submissions made by both sides, we find that the issue regarding the refund of an amount of Rs.94,860/- for non-submission of proof of export by the appellant seems to have been settled by the letter dt. 05/02/2010 issued from the office of the CCE, Pune-III to the merchant exporter. We reproduce the said letter.
7. On perusal of the letter and photocopies of ARE-1s which were produced before us, we find that the amounts involved in the ARE-1s denied to the assessee for non-production of ARE-1s. We find that the ld. Commissioner(Appeals) in his Order-in-Appeal has clearly recorded that the assessee has been taking a stand that ARE-1s had submitted to the jurisdictional Central Excise authorities, Pune for squaring up the merchant exporters bond account which is clearly evidenced from the above reproduced letter. We find that having established the fact that the goods cleared from their factory premises under the relevant ARE-1s were exported and accepted by the departmental authorities at the merchant exporters place, we find that the ld. Commissioner(Appeals) order to the extent of directing the lower authorities to grant the refund of Rs.94,860/- is correct and does not require any interference.
8. As regards the refund of Rs.49,510/- of the cenvat credit on the input services, we find that the plain reading of the provisions of Rule 5 of the CCR read with Notification No.5/2006 as amended makes it very clear that there is no requirement for co-relation between the inputs used and the goods exported. If that be so, the question of restricting the refund claim to the extent of input services used / consumed during the month / quarter seems to be mis-placed. At the same time, we find that as per the condition No.5 of the Notification No.5/2006, the calculation which has been worked out by the ld. Commissioner(Appeals) in the impugned order, if is correct, then the refund is liable to be sanctioned to the respondent/assessee. We find that there is no infirmity in the order of the ld. Commissioner(Appeals) in this regard also.
9. In view of the foregoing, we hold that the impugned order recorded by the ld. Commissioner(Appeals) is correct and appeal filed by the Revenue is liable to be rejected and we do so. The appeal is rejected.
(Operative portion of this order pronounced on conclusion of the hearing) (P.KARTHIKEYAN) MEMBER (TECHNICAL) (M.V.RAVINDRAN) MEMBER (JUDICIAL) Nr 7