Custom, Excise & Service Tax Tribunal
M/S Coromandel Stampings & Stones Ltd vs The Commissioner on 18 February, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench Single Member Bench Court I Appeal No.ST/2376/2012 (Arising out of Order-in-Appeal No.73/2012(H-II)S.Tax. dated 21-06-2012 passed by the Commissioner, C.CE&ST (Appeals-II) Hyderabad) For approval and signature: Honble Ms. Sulekha Beevi, C.S. Member(Judicial) 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 Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? M/s Coromandel Stampings & Stones Ltd. Secunderabad ..Appellant(s) Vs. The Commissioner. C.C.E&S.T.Hyderabad -II ..Respondent(s)
Appearance Shri T.Jagapathi Rao, Consultant for the Appellant Shri Vikram Kaushik, AR for the Respondent Coram:
Honble Ms. Sulekha Beevi, Member(Judicial) Date of Hearing : 18/02/2016 Date of decision: 18/02/2016 FINAL ORDER No._______________________ [Order per: Sulekha Beevi, C.S.]
1. The appellants are manufacturers of granite slabs and are also engaged in exporting these goods. The appellants filed a refund claim dated 28-12-2010 for Rs.3,30,909/- being the service tax paid by appellants on commission paid to foreign agents for the taxable service of business auxiliary services availed for export of goods during the period from January, 2010 to March, 2010. BAS services are exempted as per Notification No.18/2009-ST dated 07-07-2009. The appellants filed refund claim under Notification No.41/2007-ST, dated 06-10-2007 as amended by Notification No.17/2009ST, dated 07-07-2009. After verifying the documents, the original authority rejected the refund claim observing that appellants had exported the goods during January, 2010 to March, 2010 ie. after the introduction of Notification No.18/2009 dated 07-07-2009. That appellant had not complied with or fulfilled any of the conditions prescribed under the applicable Notification No. 18/2009-ST, dated 07-07-2009 and instead had claimed refund under Notification No.17/2009-ST which was not at all applicable in respect of the BAS provided by foreign agents. The appellants filed appeal before the Commissioner (Appeals) who vide the order impugned herein upheld the order of rejection observing that the non-fulfilment of conditions/procedures laid down under Notification No.18/2009-ST,dated 07-07-2009 cannot be condoned. Being aggrieved, the appellants have approached the Tribunal.
2. On behalf of the appellant the learned consultant Sri T.Jagapathi Rao explained that Notification No.41/2007 was rescinded and w.e.f. 07-07-2009 two separate schemes were provided by the government in relation to services used for export of goods. These Notifications are 17/2009-ST and 18/2009-ST both dated 07-07-2009. The taxable service of BAS provided by foreign commission agents and used for export of goods is specified in Notification No.18/2009-ST. The Notification grants exemption subject to fulfilment of the conditions /procedures laid down therein. He submitted that the appellant had satisfied all the conditions except the condition of intimating to the Asst/Dy.Commissioner and also filing of returns at the interval of 6 months. He pleaded that the failure to fulfil these conditions was only a procedural lapse and prayed to condone the same.
3. Against this, the learned AR supported the findings in the impugned order. He submitted that the appellant has failed to comply with the conditions laid down in the Notification No.18/2009ST dated 07-07-2009. He urged that the conditions being part of the Notification are to be strictly complied and that appellant is not eligible for refund.
4. I have heard both sides and perused the appeal papers. The grievance of the appellant is that he paid the service tax on BAS services which are exempted from service tax under Notification No. 18/2009 ST, dated 07-07-2009. The appellant has thereafter filed an application for refund of service tax. In the present case there is no dispute that the goods were actually exported. It is also not disputed that the commission paid to foreign agents is exempt from service tax under the said notification. The refund has been rejected on the ground that appellant has not complied with the conditions stated in the Notification. The said notification lays down the following conditions:-
(a) the exemption shall be available to an exporter who:-
(i) informs the Asst.Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, having jurisdiction over the factory or the regional office or the head office as the case may be, in form EXP1, before availing the said exemption.
(ii) is registered with an Export Promotion Council sponsored by the Ministry of Commerce or the Ministry of Textiles, as the case may be
(iii) is a holder of Import-Export Code Number.
(iv) is registered under Section 69 of the said Act.
(v) is liable to pay service tax under sub-section(2) of Section 68 of said Act, read with sub-clause (iv) or sub-clause (v) of clause (d) of sub-Rule (1) of Rule 2 of the Service Tax Rules, 1994, for the specified service.
(b) the invoice, bill or challan, or any other document issued by the service provider to the exporter, on which the exporter intend to avail exemption, shall be issued in the name of the exporter, showing that the exporter is liable to pay the service tax in terms of item(v) of clause(a).
(c ) the exporter availing the exemption shall file the return in form EXP2 every six months of financial year, within fifteen days of the completion of the said six months.
(d) the exporter shall submit with half yearly return, after certification, the document in original specified in clause (b) and the certified copies of the documents. Specified in column (4) of the said table:
(e) the documents enclosed with the return shall contain a certification from the exporter or the authorized person, to the effect that taxable service to which the document pertains, has been received and used for export of goods by mentioning the specific shipping bill numb on the said document.
(f) where the exporter is a proprietorship concern or partnership firm, the documents enclosed with the return shall be certified by the exporter himself and where the exporter is a limited company, the document enclosed with the return shall be certified by the person authorized by the Board of Directors.
(g)where the amount of service tax in respect of the service specified against Serial no.2 of the table exceeds one per cent, of the free on board value of the export then, the amount in excess of the said one per cent, shall be paid within the period specified under Rule 6 of the Service Tax Rules, 1994;
5. It is submitted by the learned Consultant appearing for the appellant, that all the conditions, except the condition that the appellant has to intimate the concerned Asst/Dy.Commissioner by filing Form-EXP-1 was not complied. So also, appellant failed to submit the return in Form EXP-2 as stipulated in sub- clause (c ) of the conditions stated in the Notification. Needless to say that exemption/refund /rebate etc. are export oriented schemes. If the fact of export has been established, refund is not to be denied on merely technical interpretation of procedures. In Suksha International Vs UOI 1989(39) ELT 503(SC) the Honble Apex Court has observed that an interpretation unduly restricting the scope of beneficial provision is to be avoided, so that it may not take a way with one hand, what the policy gives with the other. The Honble Apex Court in Mangalore Chemicals and Fertilisers Ltd Vs Dy.Commissioner,1991(55) ELT 437(SC) while drawing a distinction between procedural condition of a technical nature and substantive condition, held that procedural conditions of technical nature can be condoned. The procedures prescribed in the notification are to facilitate verification of the claims. Since there is no dispute with regard to the export made or the service tax paid, the non-fulfilment of the conditions in my view is condonable. Following the judgments laid in the above cases, I am of the view that the non-fulfilment of the conditions is only a procedural lapse and can be condoned. In view thereof, I hold that the appellants are eligible for refund.
6. In the result, the appeal is allowed with consequential reliefs, if any.
(Pronounced in open court)
( SULEKHA BEEVI. C.S.)
MEMBER(JUDICIAL)
Dks..
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