Custom, Excise & Service Tax Tribunal
Nmdc Limited vs Visakhapatnam-I on 17 October, 2025
(1) Appeal No. ST/30322-30324/2016,
30526,30527,30875,30876/2018,
30447,30448/2019
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
HYDERABAD
REGIONAL BENCH - COURT NO. - I
Service Tax Appeal No. 30322 of 2016
(Arising out of Order-in-Appeal No.VIZ-EXCUS-001-APP-068-15-16 dated 11.02.2016
passed by Commissioner of Central Excise, Customs & Service Tax (Appeals),
Visakhapatnam)
M/s NMDC Ltd., .. APPELLANT
Khanij Bhavan, Port Area,
Visakhapatnam,
Andhra Pradesh-530 035.
VERSUS
Commissioner of Central Tax .. RESPONDENT
Visakhapatnam - GST
GST Commissionerate,
Port Area,
Visakhapatnam,
Andhra Pradesh - 530 035.
WITH
Service Tax Appeal No. 30323 of 2016
(Arising out of Order-in-Appeal No.VIZ-EXCUS-001-APP-069 to 070-15-16 dated
12.02.2016 passed by Commissioner of Central Excise, Customs & Service Tax (Appeals),
Visakhapatnam)
M/s NMDC Ltd., .. APPELLANT
Khanij Bhavan, Port Area,
Visakhapatnam,
Andhra Pradesh - 530 035.
VERSUS
Commissioner of Central Tax .. RESPONDENT
Visakhapatnam - GST
GST Commissionerate,
Port Area,
Visakhapatnam,
Andhra Pradesh - 530 035.
WITH
Service Tax Appeal No. 30324 of 2016
(Arising out of Order-in-Appeal No.VIZ-EXCUS-001-APP-069 to 070-15-16 dated
12.02.2016 passed by Commissioner of Central Excise, Customs & Service Tax (Appeals),
Visakhapatnam)
M/s NMDC Ltd., .. APPELLANT
Khanij Bhavan, Port Area,
Visakhapatnam,
Andhra Pradesh - 520 035.
VERSUS
Commissioner of Central Tax .. RESPONDENT
Visakhapatnam - GST
GST Commissionerate,
Port Area,
(2) Appeal No. ST/30322-30324/2016,
30526,30527,30875,30876/2018,
30447,30448/2019
Visakhapatnam,
Andhra Pradesh - 530 035.
WITH
Service Tax Appeal No. 30526 of 2018
(Arising out of Order-in-Appeal No.VIZ-EXCUS-001-APP-197-198-17-18 dated 25.01.2018
passed by Commissioner of Central Excise, Customs & Service Tax (Appeals),
Visakhapatnam)
M/s NMDC Ltd., .. APPELLANT
Khanij Bhavan, Port Area,
Visakhapatnam,
Andhra Pradesh -530 035.
VERSUS
Commissioner of Central Tax .. RESPONDENT
Visakhapatnam - GST
GST Commissionerate,
Port Area,
Visakhapatnam,
Andhra Pradesh - 530 035.
WITH
Service Tax Appeal No. 30527 of 2018
(Arising out of Order-in-Appeal No.VIZ-EXCUS-001-APP-197-198-17-18 dated 25.01.2018
passed by Commissioner of Central Excise, Customs & Service Tax(Appeals),
Visakhapatnam)
M/s NMDC Ltd., .. APPELLANT
Khanij Bhavan, Port Area,
Visakhapatnam,
Andhra Pradesh -530 035.
VERSUS
Commissioner of Central Tax .. RESPONDENT
Visakhapatnam - GST
GST Commissionerate
Port Area,
Visakhapatnam,
Andhra Pradesh - 530 035.
WITH
Service Tax Appeal No. 30875 of 2018
(Arising out of Order-in-Appeal No.VIZ-EXCUS-001-APP-011-18-19 dated 19.04.2018
passed by Commissioner of Central Excise, Customs & Service Tax (Appeals),
Visakhapatnam)
M/s NMDC Ltd., .. APPELLANT
Khanij Bhavan, Port Area,
Visakhapatnam,
Andhra Pradesh - 520 035.
VERSUS
Commissioner of Central Tax .. RESPONDENT
Visakhapatnam - GST
GST Commissionerate,
Port Area,
Visakhapatnam,
(3) Appeal No. ST/30322-30324/2016,
30526,30527,30875,30876/2018,
30447,30448/2019
Andhra Pradesh - 530 035.
WITH
Service Tax Appeal No. 30876 of 2018
(Arising out of Order-in-Appeal No.VIZ-EXCUS-001-APP-028-18-19 dated 27.04.2018
passed by Commissioner of Central Tax & Customs (Appeals), Visakhapatnam)
M/s NMDC Ltd., .. APPELLANT
Khanij Bhavan, Port Area,
Visakhapatnam,
Andhra Pradesh- 530 035.
VERSUS
Commissioner of Central Tax .. RESPONDENT
Visakhapatnam - GST
GST Commissionerate,
Port Area,
Visakhapatnam,
Andhra Pradesh - 530 035.
WITH
Service Tax Appeal No. 30447 of 2019
(Arising out of Order-in-Appeal No.VIZ-EXCUS-001-APP-275-18-19 dated 15.02.2019
passed by Commissioner of Central Excise, Customs & Service Tax (Appeals),
Visakhapatnam)
M/s NMDC Ltd., .. APPELLANT
Khanij Bhavan, Port Area,
Visakhapatnam,
Andhra Pradesh - 530 035.
VERSUS
Commissioner of Central Tax .. RESPONDENT
Visakhapatnam - GST
GST Commissionerate,
Port Area,
Visakhapatnam,
Andhra Pradesh -530 035.
AND
Service Tax Appeal No. 30448 of 2019
(Arising out of Order-in-Appeal No.VIZ-EXCUS-001-APP-025-19-20 dated 31.05.2019
passed by Commissioner of Central Excise, Customs & Service Tax (Appeals),
Visakhapatnam)
M/s NMDC Ltd., .. APPELLANT
Khanij Bhavan, Port Area,
Visakhapatnam
Andhra Pradesh-520 035
VERSUS
Commissioner of Central Tax .. RESPONDENT
Visakhapatnam - GST
GST Commissionerate,
Port Area,
Visakhapatnam,
Andhra Pradesh - 530 035.
(4) Appeal No. ST/30322-30324/2016,
30526,30527,30875,30876/2018,
30447,30448/2019
APPEARANCE:
Shri T. Viswanathan, Shri Ch. Sumanth & Ms Anushka Rastogi, Advocates for
the Appellants.
Shri Rajpal Sharma (Special Counsel), Authorized Representative for the
Respondents.
CORAM: HON'BLE Mr. A.K. JYOTISHI, MEMBER (TECHNICAL)
HON'BLE Mr. ANGAD PRASAD, MEMBER (JUDICIAL)
FINAL ORDER No. A/30431-30439/2025
Date of Hearing:24.07.2025
Date of Decision:17.10.2025
[ORDER PER: A.K. JYOTISHI]
NMDC Limited (hereinafter referred to as appellant) is a public sector
undertaking engaged in exploration and sale of Minerals and, interalia,
having Service Tax registration. The NMDC filed several refund claims in
Form A for refund of Service Tax paid on certain services in relation to
export of Iron Ore in terms of Notification No. 41/2012-ST dated
29.06.2012. The Refund Sanctioning Authority, vide various orders, rejected
the claims of rebate/refunds except in ore case and on appeal by the
appellant, the Commissioner upheld the order of the Adjudicating Authority
rejecting the claims and in some instance upheld the decision of demand in
respect of erroneously refunded amount, wherein, the issues involved were
identical. The appellants have come before this Tribunal in respect of such
orders under different appeals. For ease of reference all these appeals with
relevant details are summarised in the table below:
Sl Appeal No. Period Refund OIO No. OIA No. Remarks
No amount
involved
(INR)
REFUND SANCTIONED INITIALLY BUT SUBSEQUENTLY DEMANDED BACK AS ERRONEOUS
REFUND UNDER SECTION 73 OF THE FINANCE ACT, 1994 WITHOUT FILING APPEAL AGAINST
ORDER SANCTIONING THE REFUND . THE PRESENT PROCEEDING IS CULMINATING FROM SCN
ISSUED FOR RECOVERY OF REFUND.
1. ST/30526/2018 July 2012 to 23,35,09,950 05/2016-17 VIZ-EXCUS- - Refund sanctioned
September (R) dated 001-APP-197- vide OIO dated
2013 27.05.2016 198-17-18 29.11.2013. No
dated appeal filed against
25.01.2018 OIO dated
(5) Appeal No. ST/30322-30324/2016,
30526,30527,30875,30876/2018,
30447,30448/2019
29.11.2013.
- Refund sanctioned
was demanded to be
recovered vide OIO
dated 27.05.2016.
Demand of refund
erroneously sanction
upheld vide OIA and
is appealed by the
Appellant.
REFUND SANCTIONED INITIALLY BUT SUBSEQUENTLY ALLEGED TO BE ERRONEOUSLY
SANCTIONED UNDER SECTION 73 OF THE FINANCE ACT, 1994 BY FILING APPEAL AGAINST
REFUND SANCTION ORDER. THE PRESENT PROCEEDING IS CULMINATING FROM THE ORDER-IN-
APPEAL IN APPEALS FILED BY THE DEPARTMENT.
2. ST/30323/2016 October 11,70,35,873 22/2014(R) VIZ-EXCUS- Refund sanctioned
2013 to dated 001-APP-069 to vide OIO dated
March 2014 18.07.2014 070-15-16 18.07.2014 and
3. ST/30324/2016 April 2014 7,32,39,107 33/2014(R) dated 01.10.2014.However,
to June dated 12.02.2016 on department appeal
2014 01.10.2014 refund rejected vide
OIA dated 12.02.2016
SUB-TOTAL [2+3] 19,02,74,980
REFUND REJECTED BY ADJUDICATING AUTHORITY AND UPHELD BY APPELLATE AUTHORITY
WHICH IS UNDER CHALLENGE IN THE PRESENT APPEALS
4. ST/30322/2016 July 2014 to 7,02,16,187 04/2015 (R) VIZ-EXCUS-
September dated 001-APP-068-
2014 14.05.2015 15-16 dated
11.02.2016
5. ST/30527/2018 October 12,16,59,243 19/2016 (R) VIZ-EXCUS-
2014 to dated 001-APP-197- Refund rejected by the
March 2015 23.02.2016 198-17-18 OIO and upheld by
dated OIA
25.02.2018
6. ST/30875/2018 October 10,29,73,618 12/2016- VIZ-EXCUS-
2015 to 17(R) dated 001-APP-011-
March 2016 21.10.2016 18-19 dated
19.04.2018
7. ST/30876/2018 April 2016 9,07,43,153 1/2017- VIZ-EXCUS-
to 18(R) dated 001-APP-028-
September, 18.04.2017 18-19 dated
2016 27.04.2018
8. ST/30447/2019 October 8,75,16,221 150/2017- VIZ-EXCUS-
2016 to 18 (R) dated 00I-APP-275-
March 2017 11.01.2018 18-19 dated
15.02.2019
9. ST/30448/2019 April 2017 4,44,99,205 166/2017- VIZ-EXCUS-
to June 18(R) dated 001-APP-025-
2017 09.03.2018 19-20, dated
31.05.201
SUB-TOTAL [4+5+6+7+8+9] 51,76,07,627
GRAND TOTAL 94,13,92,557
2. The relevant facts common to all these appeals are that during the
relevant period under Exim Policy, iron ore of more than 64% Fe content
were required to be exported only through MMTC Ltd, which was also a
(6) Appeal No. ST/30322-30324/2016,
30526,30527,30875,30876/2018,
30447,30448/2019
Public Sector undertaking. Therefore, the appellant entered into a Tri-partite
Memorandum of Understanding (MoU) with MMTC and foreign buyers in
respect of export of iron ore of more than 64% Fe Content (MoU) and also
entered into a separate contract with MMTC vide sale purchase agreement
dated 20.05.2007. The practise being followed was by the appellant was that
they transported iron ore from their mines to Visakhapatnam Port for which
they were paying freight charges to Railways and they were both consignee
and consignor for the said consignment. Upon reaching at Vizag Port, the
appellant further incurred certain additional expenditure on railway freight,
Haulage & Tipping Charges, Terminal Charges, Sampling & Draft Survey
charges, etc., for transportation of iron ore to the designated port stockpile
and has also discharged service tax thereon. The MMTC, on the other hand,
were paying charges for mechanical loading of material from port stockpile
into ships and also paid service tax thereon. MMTC subsequently claimed
rebate of service tax paid on the above services alone and also gave
declaration to NMDC for claiming refund in respect of others services.
3. The appellant claimed refund of service tax paid by them in respect of
export of iron ore in terms of Notification No.41/2012-ST dated 20.06.2012,
Which was initially sanctioned but subsequently rejected, primarily on the
grounds that appellants were not an "exporter" by itself with reference to
said exported goods as was evident from shipping bills and commercial
invoices wherein, the name of the exporter was mentioned as MMTC Limited.
The Department felt that even the sale proceeds from the export of goods
were being directly credited to the accounts of MMTC. Department also felt
that even if both parties could be considered a single exporter, the claim for
refund can be sought only by one party and MMTC had already sought the
refunds which were also sanctioned. It was also noted that in terms of
(7) Appeal No. ST/30322-30324/2016,
30526,30527,30875,30876/2018,
30447,30448/2019
condition 3(k)(iii), before granting refund it was to be ensured that rebate
has not been received on the same shipping bill or Bill of export.
4. We find that since the issues are similar in all these appeals, we intend
to take up and dispose of all these appeals together.
5. Learned Advocate for the appellant is contesting the stand of the
Department that they are not exporter in relation to the export said of iron
ore of above 64% primarily on the ground that they are the exporters, if the
Tri-partite MoU is holistically understood in the context of the restrictions
imposed on import under the Exim Policy prohibiting Direct Export of Iron
ore having more than 64% Fe content. In so far as Department's argument
that the term exporter has not been defined under Service Tax and therefore
reliance has to be placed on the definition of export and exporter under the
Customs Act, it would be obvious that term Exporter includes any owner or
any person. Since, they are the owner of the goods and as per Agreement,
the title in goods passes from NMDC to MMTC only when MMTC receives the
sale proceeds, thus they are also to be considered as exporter. Secondly, he
relies on Board's Circular No. 120/1995-Cus dated 23.11.1995 which
clarified that there could be one or more exporters relying on the judgement
in the case of Re: Ikea Trading India Limited [2003 (157) ELT 359 (GOI)],
wherein, it was observed that exporter under Section 2(20) of Customs Act
include their plural and at a time there can be more than one exporter for
goods. He also submits that an exporter or manufacturer/exporter have the
option to claim rebate. Therefore, both, the appellant being manufacturer
exporter and MMTC being merchant exporter are eligible to claim rebate of
service tax paid for export of goods. He is also relying on the judgement of
Co-ordinate Bench in the case of SK Sarawagi & Company Pvt Ltd Vs CCE
[2020 (35) GSTL 208 (T)]. Reliance is also placed on CCE & ST, Tirupati vs
(8) Appeal No. ST/30322-30324/2016,
30526,30527,30875,30876/2018,
30447,30448/2019
Sudalagunta Sugars Ltd., [2014 (34) STR 114 (Tri-Bang)]. His alternative
argument is that the exports have been made by the Appellant through
MMTC and not by MMTC relying on para 2.01 and 2.02 of Foreign Trade
Policy 2015 - 2.20(a),(b) and (c) , Para 2.21, Para 2.22 and 2.42 etc. He is
also contesting that department has not correctly understood the meaning of
paragraph of the said notification, where there is no such condition or
restriction. He is also contesting that the substantive entitlement of refund
could not have been denied due to non- compliance of certain procedural
requirement in the notification, when the correlation of service with exported
goods is established. In this regard, he has relied on the judgments of
Madura Garments Exports Limited Vs CCE [2015 (39) STR 661 (Tri-
Mumbai)] and Fazlani Exports Pvt Ltd., Vs CST, Mumbai-I [2015 (16) TMI
827 - CESTAT MUMBAI].
6. On the other hand, the Learned Special Counsel for the Revenue
rebutted these submissions. Insofar as the ground that NMDC satisfies the
definition of exporter on the assumption that they continue to be the owner
of iron ore till these were exported in terms of the sale purchase agreement
between them and MMTC, he has relied on the definition of Export under
Section 2(18), Exporter under Section 2(20) under the Customs Act 1962,
and thereafter based on this he submits that the real exporter is the one
who actually exported the goods by making entry of goods in the form of
shipping bill or Bill of export under Section 50 of Customs Act and cleared for
export under Section 51. Therefore, from Customs point of view, the
appellant cannot be accepted as exporter, as neither export orders were
issued to the appellant nor shipping bills and other export related documents
like invoices were filed by the appellant with the Customs and even Bill of
Ladings were also not in their name and the sales proceeds were also not
(9) Appeal No. ST/30322-30324/2016,
30526,30527,30875,30876/2018,
30447,30448/2019
received by the appellant. He relied on the judgement of the Co-ordinate
Bench in the case of Sudalagunta Sugars Ltd., [2014 (34) STR 114 (Tri-
Bang)], wherein, it was held that if the exporter is to be identified as per
Customs Act, the person whose name appears in the shipping bill, is an
exporter of the goods. He has also relied on certain relevant terms and
conditions of the MoU to substantiate his argument that sale of iron ore by
NMDC to MMTC, wherein the appellant has been termed as seller and MMTC
as purchaser and it is the MMTC, which had executed a long term contract
with overseas steel mills for sale of ores to such foreign buyers. He also
emphasises that all the risk of loss, damage or destruction in respect of ore
so delivered passed on to buyer i.e MMTC at the time of discharge of ore
from the loading device into the vessel. He is also contesting the claim of the
appellant that their name was mentioned as manufacturer / third party
exporter in the shipping bill and relies on the copy of the shipping bill
annexed with Appeal No. ST/30323/2016 and Appeal No. ST/30324/2016.
He further submits that since they had taken service tax registration in
terms of para iii(D) of Notification No. 41/2012-ST, which was required to be
taken only by those who were not having central excise registration as
manufacture, therefore even assuming that they were mentioned as third
party exporter, the appellant did not acquire the status of an exporter of
goods for the purpose of getting refund of service tax under the Notification
No. 41/2012-ST.
7. Further, on the grounds that the appellant had inseperable link with
the exported goods, his submission is that the set link was severed the
moment iron ores were sold and delivered to MMTC in Visakhapatnam Port.
The placing of reliance on Article 7 of sale purchase agreement are merely
terms and conditions agreed by the appellant and MMTC in the context of
(10) Appeal No. ST/30322-30324/2016,
30526,30527,30875,30876/2018,
30447,30448/2019
sale and purchase of iron ore and merely because of these contractual
arrangements, the appellants cannot acquire the status of an exporter. He is
also highlighting the fact that sales proceeds in foreign exchange is being
recovered by the MMTC and thereafter certain amount in Indian Currency
(INR) was being transferred by them to NMDC as per terms and conditions.
Thus, ore of the basic feature of being exporter is not present as NMDC has
not recovered the sales proceeds from foreign buyer directly or in
convertible foreign currency. He is also relying on the fact that the
notification must be strictly construed in view of the judgment of Hon'ble
Supreme Court in the case of Dilip Kumar & Company [2018 (361) ELT 577
(SC)].
8. Heard both the sides and perused the records.
9. The issue to be decided is whether the appellant is entitled to avail the
refund of Service Tax in terms of Notification No. 41/2012-ST dated
20.06.2012 or otherwise. Before we proceed, some of the relevant statutory
provisions and notifications are cited below for ease of reference in relation
to certain exports made through MMTC.
The term 'export' has been defined under Section 2(18) of the Customs Act, 1962 as
under:
"(18) "export", with its grammatical variations and cognate expressions, means taking
out of India to a place outside India".
Section 2(20) of Customs Act, as extracted below defines exporter as under:
'exporter', in relation to any goods at any time between their entry for export and the
time when they are exported, includes any owner or any person holding himself out to
be the exporter.
Notification No. 41/2012:
In exercise of the powers conferred by section 93A of the Finance Act, 1994 (32 of 1994)
(hereinafter referred to as the said Act) and in supersession of the notification of the
(11) Appeal No. ST/30322-30324/2016,
30526,30527,30875,30876/2018,
30447,30448/2019
Government of India in the Ministry of Finance (Department of Revenue) number 52/2011 -
Service Tax, dated the 30th December, 2011, published in the Gazette of India,
Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 945(E), dated the 30th
December, 2011, except as respects things done or omitted to be done before such
supersession, the Central Government, on being satisfied that it is necessary in the public
interest so to do, hereby grants rebate of service tax paid(hereinafter referred to as rebate)
on the taxable services which are received by an exporter of goods (hereinafter referred
to as the exporter) and used for export of goods, subject to the extent and manner
specified herein below, namely:-. (emphasis supplied)
.............
.............
.............
(2) the rebate shall be claimed in the following manner, namely:-
(a) manufacturer-exporter, who is registered as an assessee under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder shall register his central excise registration number and bank account number with the customs;
(b) exporter who is not so registered under the provisions referred to in clause
(a), shall register his service tax code number and bank account number with the customs;
(c) service tax code number referred to in clause (b), shall be obtained by filing a declaration in Form A-2 to the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, having jurisdiction over the registered office or the head office, as the case may be, of such exporter;
(d) the exporter shall make a declaration in the electronic shipping bill or bill of export, as the case may be, while presenting the same to the proper officer of customs, to the effect that--
(i) the rebate of service tax paid on the specified services is claimed as a percentage of the declared Free On Board(FOB) value of the said goods, on the basis of rate specified in the Schedule;
(ii) no further rebate shall be claimed in respect of the specified services, under procedure specified in paragraph 3 or in any other manner, including on the ground that the rebate obtained is less than the service tax paid on the specified services;
(iii) conditions of the notification have been fulfilled;
(e) service tax paid on the specified services eligible for rebate under this notification, shall be calculated by applying the rate prescribed for goods of a class or description, in the Schedule, as a percentage of the FOB value of the said goods;
(f) amount so calculated as rebate shall be deposited in the bank account of the exporter;
(g) shipping bill or bill of export on which rebate has been claimed on the basis of rate specified in the Schedule, by way of procedure specified in this paragraph, shall not be used for rebate claim on the basis of documents, specified in paragraph 3;
(h) where the rebate involved in a shipping bill or bill of export is less than rupees fifty, the same shall not be allowed;
(3) the rebate shall be claimed in the following manner, namely:-
............
.............
(12) Appeal No. ST/30322-30324/2016,
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(k) ..........
...........
...........
(iii) that rebate has not been already received on the shipping bills or bills of export on the basis of procedure prescribed in paragraph 2;and
(iv) that the rebate claimed is arithmetically accurate, refund the service tax paid on the specified service within a period of one month from the receipt of said claim:
10. Therefore, the core issue that is to be decided in the present set of appeals is whether it is NMDC who is the "exporter" qua the consignment exported or it is the MMTC who is the exporter. This is important because a plain reading of Notification No. 41/2012, supra, indicates that it provides for rebate by way of refund of service tax paid on taxable services which are received by an exporter of goods (emphasis supplied), and used for export of goods, subject to certain conditions. The Adjudicating Authority has not considered NMDC as exporter on multiple counts. The primary being that their name is not appearing as exporter on the shipping bill as exporter. This has been admitted by the appellant also except that they said that their names are appearing as a third party exporter on some of the Shipping Bills.
The Adjudicating Authority has also noted that the NMDC were not eligible to export iron ore of Fe content more than 64% and above as per the Extent Policy and it was required to be exported through STE only, which in this case happened to be MMTC. He also considered agreement between NMDC and MMTC which was in the nature of sale and purchase agreement on back to back basis. It was also noted that the shipping bills were filed by the MMTC under the category of their import-export code no. 059100946 and all the documents relating to exports such as export invoice, bill of lading etc., were also in the name of MMTC. Further, the export proceeds were realised by MMTC from the foreign buyers. He has also relied on some of the judgments passed by Co-ordinate Bench of CESTAT, as also by Income Tax (13) Appeal No. ST/30322-30324/2016, 30526,30527,30875,30876/2018, 30447,30448/2019 Appellate Tribunal, from which it could be inferred that the iron ore exported by the NMDC were actually purchased by MMTC first and sold by NMDC. Reliance was placed on the case of MMTC Ltd., Vs Commissioner of Central Excise, Visakhapatnam [2013 (30) STR 203 (Bang)], wherein, interalia, it was also observed that the export proceeds were being received by the MMTC and they were, after retaining their fixed percentage of 3%, paying the remaining amount to NMDC. In the case of Income Tax matter, the ITAT in the case of NMDC Ltd., interalia, noted that the appellant i.e. NMDC submitted that the transactions between NMDC and MMTC were in the nature of sale and purchase and therefore the amount earned by the appellant cannot be treated as commission paid by NMDC and therefore no TDS was deductible at the end of NMDC.
11. Learned Special Counsel has forcefully submitted that for the purpose of Notification No. 41/2012, the expression 'exporter' and 'export' of goods has to be understood in terms of Section 2(20) of the Customs Act. Further, a plain reading of definition of 'exporter' and 'exporter of goods' indicates that essentially the goods has to be taken outside India for it's being considered as export and an exporter has to be construed accordingly. According to him, NMDC is not the one who is taking the goods outside India from his mines and he has handed over the goods to the MMTC at the designated place in the port area and thereafter it is the MMTC which has taken over the goods in terms of Sales Purchase Agreement and thereafter exported the same in their independent capacity to the foreign buyers. MMTC has filed the Shipping Bill and all the relevant documents concerning export are exclusively in his name like Bill of Lading, Commercial Invoice etc. That the concept of third party exporter or otherwise are not relevant for deciding as to who shall be considered as an exporter of goods for the (14) Appeal No. ST/30322-30324/2016, 30526,30527,30875,30876/2018, 30447,30448/2019 purpose of rebate of service tax under Notification No. 41/2012, as these terms are meant for granting certain export incentives and benefit under certain schemes in terms of EXIM Policy and not under Customs Act or Finance Act under which the said notification has been issued. Therefore, a plain reading of notification and the expression used, it would be obvious that it the exporter of the goods, who exports the goods will be eligible for the said rebate/refund and nobody else. He has also relied on various terms and conditions of the Sale Purchase Agreement between the MMTC and NMDC to support his submission that they are not even owner of the goods post filing of Shipping Bill and therefore by virtue of inclusive definition also they could not be put in the place of exporter qua the said consignment. He has especially highlighted Article X of Sale Purchase Agreement to highlight that the risk of loss, damage or destruction in respect of Ore delivered has passed to the MMTC at the time of discharge of ore from loading devices into the vessels, from which it was obvious that the ownership of the goods had shifted to the MMTC in the customs area itself before sailing out of India and this is the fact which clearly contradicts the appellant claims that the title of exported goods remained with NMDC until sale proceeds were received by the buyers.
12. We also note that some of the admitted facts in this bunch of appeals are that there was a restriction on export of iron ore above 64% Fe content in terms of extent EXIM Policy of 2015-20. On perusal of the Policy at Serial No. 73, it is noted that iron ore, other than that is specified under free category, were having certain restrictions in terms that the said export has to be through STE/MMTC. We have perused the Memorandum of Understanding (MoU) and Sale and Purchase Agreement, as well as other documents like sample Shipping Bills, Advance Authorisation etc., submitted (15) Appeal No. ST/30322-30324/2016, 30526,30527,30875,30876/2018, 30447,30448/2019 by the appellant and note that MoU dated 09.05.2012 was made between Sumitomo Metal Industries Ltd., and MMTC and NMDC Ltd., - for Sale and Purchase of Indian iron ore. We have also seen a copy of agreement between NMDC and MMTC Ltd., for sale of iron ore by former to later for export. This agreement is in the nature of Sale and Purchase agreement, where the NMDC was to sell and deliver the iron ore and the MMTC was to purchase and pay exclusively for export against aforesaid sale contract to NMDC. Apart from certain qualitative specifications, it also provided for certain general conditions under Article VI. For the ease of reference, the same are reproduced below:
Article VII: General Conditions:
1. The responsibility for cargo convergence would lie with Seller Coordination with the Railways for this purpose would also be carried out by Seller in Bailadila sector. The buyer also would co- ordinates with Railways in Donimalai sector along with seller.
2. The port plots would continue to be held by Buyer. Seller would be authorized to operate the plots by converging its cargo on these plots. While Seller would be authorized to operate the entire plots at Vizag port held by Buyer, it would be authorized to operate Buyer's plots at Chennai to the extent required for Export.
3. Seller would pay the port charges relating to exports of cargo of NMDC origin directly to the port in the designated Buyer deposit account with the respective ports. Payment of other statutory dues like labour welfare cess etc. Would also be made on similar basis. However, the reconciliation of accounts shall be carried out on quarterly basis without fail.
4. The shipment documentation for all shipments ex-Vizag and Chennai would be done by MMTC including Shipping Bill, bill of loading etc. Co-ordination with customs for inspection of cargo will be done by MMTC at Vizag and Chennai. MMTC shall depute personal on board vessel at the time of loading and co-ordinate for proper loading.
5. MMTC shall appoint assayer for supervision of draft survey and Sampling & Analysis work at discharge port. Discharge port supervision charges would be reimbursed by NMDC to MMTC within two bank working days of receipt of MMTC's claim by any mode, i.e by fax, mail, courier etc. (16) Appeal No. ST/30322-30324/2016, 30526,30527,30875,30876/2018, 30447,30448/2019
6. All terms and conditions as stipulated in buyers corresponding sale contract dated 31st May 2006 with Japanese Steel Mills apply to the contract unless otherwise agreed upon.
7. All claims and problems arising from non-fulfilment of quantity / quality etc. of cargo will be settled between the Buyer M/s MMTC Limited and Foreign Buyers (JSM) in consultation with NMDC.
8. MMTC would nominate vessel in consultation with NMDC as per the quantity allocated by NMDC on quarterly basis.
9. NMDC shall appoint Assayer for sampling analysis and draft survey at load port.
10. MMTC shall co-ordinate with port authorities at Vizag and Chennai for berthing vessel in time to avoid / reduce demurrage.
A plain reading of these conditions would indicate that there was a designated place, where NMDC were to converge its cargo. This place was belonging to the MMTC, however, the buyers were authorised to operate and converge their cargo in these plots. It also provided that NMDC would pay the port charges relating to exports of cargo of NMDC origin directly to the port in the designated buyer (MMTC) deposit account with the respective ports payment and other statutory dues like labour welfare cess etc., would also be made on similar basis. In other words, NMDC were required to pay port related charges as if it is being paid by MMTC. There was a clear provision that shipment documents for all shipment would be done by MMTC. Even the claims and problems arising from non-fulfilment of quantity/quality etc., of cargo were to be settled between the foreign buyer and MMTC in consultation with NMDC. It, however, also provided that MMTC will give disclaimer certificate to the NMDC for claiming any export incentive, as may be allowed by the Government from time to time. As regards payment, MMTC were required to raise provisional invoice after completion of shipment and the NMDC was required to raise provisional invoice of the shipment value after completion of shipment and the MMTC was required to pay in Indian Rupees by Demand Draft within two working days of receipt of their (17) Appeal No. ST/30322-30324/2016, 30526,30527,30875,30876/2018, 30447,30448/2019 payment through foreign buyers. Further, terms of Article X are cited below for the ease of reference:
Article X: Transfer of Title And Risk:
In view of the provisions of the JSM contract with the buyer (MMTC), title with respect of each shipment shall pass from Seller to Buyer when the buyer receives the sale proceeds from the foreign buyer against the relative shipping documents after completion of loading and trimming of vessel at the Indian port, with effect retrospective to the time of delivery of Ore.
All risk of loss, damage or destruction respecting Ore delivered shall pass to Buyer at the time of discharge of Ore from the loading devices into the vessel.
It provided that the title of the receipt of each shipment was to pass through NMDC to MMTC when the MMTC receive sale proceeds from foreign buyers after completion of loading and trimming of vessel at the Indian port, with retrospective effect to the time of delivery of ore by NMDC to MMTC.
Therefore, this provision also makes it clear that the ownership of NMDC had ended at the time of converging or unloading the said ore at the designated area of MMTC. However, by way of mutual understanding, ownership was made effective retrospectively to the time of delivery of ore. Therefore, the ownership of goods was clearly in the name of MMTC before it was actually exported out of India.
13. Further, it is also apparent that there was a restriction on export of iron ore of 64% Fe content and above and therefore NMDC could not have exported this category of iron ore on their own. The MMTC were only eligible to export this variety of iron ore, but they did not have this type of iron ore available as they did not have Iron Ore Mine. Therefore, they entered into a Sale and Purchase Agreement with NMDC to get this variety of iron ore in India and in terms of various conditions of the agreement, it was required to be delivered at the designated area in the port by the NMDC. Some of the (18) Appeal No. ST/30322-30324/2016, 30526,30527,30875,30876/2018, 30447,30448/2019 activities were also undertaken by NMDC on behalf of the MMTC at the Port like payment of certain charges, taxes etc., however, all of these were paid on behalf of the MMTC and not on their own account. It is also an admitted fact that for any export, a general condition is that the sale proceeds has to be realised by the exporter in convertible foreign exchange, unless otherwise permitted by the Reserve Bank of India. In this case, the foreign exchange has been realised by the MMTC and not by NMDC and MMTC have converted the said amount into Indian Rupees and after taking their agreed commission, sent the remaining amount as sale proceeds in INR for purchasing the said iron ore from the MMTC. In the facts of the case, NMDC cannot be even held as Merchant exporter or manufacture exporter as the moment they are one of the exporter, the provision of restriction would apply and export would become restricted. In this case, their claim being a third party exporter also will have no relevance as there is no concept of third party exporter, under the Customs Act or under the Service Tax in the context of the notification under which the said rebate claims have been filed. The concept of merchant exporter and manufacture exporter or third party exporter etc., has heavily relied upon by the appellant but we find that it is relevant for certain export benefits under the EXIM Policy, subject to the claims being covered within the definition of merchant exporter or manufacture exporter or third party exporter etc. In fact, we note that, in this case, through mutual agreement, MMTC has allowed NMDC to claim such certain export benefit which would obviously be covering their entitlement, if any, under EXIM Policy.
14. The State Trading Enterprise (STE) have been defined at para 2.20 of Foreign Trade Policy cited below for ease of reference:
(19) Appeal No. ST/30322-30324/2016, 30526,30527,30875,30876/2018, 30447,30448/2019 2.20: State Trading Enterprises (STEs)
(a) State Trading Enterprises (STEs) STEs are governmental and non-
governmental enterprises, including marketing boards, which deal with goods for export and/or import. Any good, import or export of which is governed through exclusive or special privilege granted to State Trading Enterprises (STE), may be imported or exported by the concerned STE as per conditions specified in ITC (HS). The list of STEs notified by DGFT is in Appendix 2j.
(b) Such STE(s) shall make any such purchases or sales involving imports or exports solely in accordance with commercial considerations, including price, quality, availability, marketability, transportation and other conditions of purchase or sale in a non discriminatory manner and shall afford enterprises of other countries adequate opportunity, in accordance with customary business practices, to compete for participation in such purchases or sales.
(c) DGFT may, however, grant an authorization to any other persons to import or export any of the goods notified for exclusive trading through STEs. A plain reading of this provision would indicate that in relation to restricted category of goods, where the STE has been given a special privilege for import and export, they have been given certain guidelines to make any purchase or sale involving imports and exports solely in accordance with commercial constructions including price, quality, availability, marketability etc. In the present appeal, there is no dispute that MMTC is STE, who has authorised to export said ore and therefore they could not have made NMDC as exporter and therefore they had back-to-back sale and purchase agreement for purchase of certain quantity of ore for which they may also have a general Tri-partite MoU including foreign buyer. Therefore, the MoU with foreign buyer is only for the comfort of the foreign buyer about the availability of source of ore of requisite quality and quantity the said MoU, per se, cannot be interpreted in a manner where it will be deemed to be that both NMDC and MMTC are to be treated as exporter qua the foreign buyers. We have also perused the definition of third party at para 2.42 of the FTP, (20) Appeal No. ST/30322-30324/2016, 30526,30527,30875,30876/2018, 30447,30448/2019 wherein, it has been provided that the export documents such as shipping bills shall indicate name of both manufacturing exporter/ manufacturer and third party exporter as also Bank Realisation Certificate (BRC), export order and invoice should be in the name of third party exporter. In this case, MMTC could have claimed them as third party exporter but they have not as they are claiming themselves as the exporter and it is NMDC, who is claiming themselves as third party exporter. Further, it is obvious that NMDC has no locus standi as their names are not appearing on BRC, export order and invoice. Thus, their claim that they are the third party exporter is also not correct in terms of definition of third party exporters.
15. To sum up, this is a case where NMDC was restricted from exporting the iron ore of Fe Content after 64% while MMTC was fully permitted to export the said variety of iron ore. However, the MMTC had no such iron ore available being not in the business of mining. On getting a foreign buyer, MMTC agreed to supply the same after buying it from NMDC in terms of Sale Purchase Agreement with NMDC as also in terms of understanding under MoU. The terms and conditions of relevant documents would indicate that NMDC's real scope was to deliver the goods at designated site of MMTC in the Port and it was the MMTC, who became owner thereafter and exported the same under their name. Various commercial understanding of risk, damage, quality, payment etc., were also not relevant for deciding as to who was the real owner at the point at which the goods were actually exported out of India. It was MMTC who were the exporter, as understood under the Customs Act and therefore were eligible to claim the rebate/refund under Notification No. 41/2012 and in fact they did availed and also got rebate under this notification. Since, the NMDC cannot be considered as exporter for these consignments and therefore were not eligible for claiming any (21) Appeal No. ST/30322-30324/2016, 30526,30527,30875,30876/2018, 30447,30448/2019 rebate/refund in respect of any service tax paid by them, irrespective of the fact that when the said goods were purchased by the MMTC and same were subsequently exported by them. Their having got certain benefits under the EXIM Policy as merchant exporter or as third party exporter is of no consequence to decide the benefit of notification issued under Finance Act 1994, which was restricted only to the exporter of the goods, who have exported the goods.
16. The appellants have also relied on various case laws in their support and we have perused the same. In the case of Associated Cement Company Ltd., Vs CC [2001 (128) ELT 21 SC], which has been relied upon to support that there can be more than one exporter in terms of definition of exporter. Apart from the facts, issue is not similar to the issue in hand, even in that matter the Hon'ble Supreme Court held certain person as importer, who were made liable for non-levy or short-levy of customs duty. Para 63 is reproduced for ease of reference:
63. It cannot be denied that the imports were made by the appellants. The courier or any other passenger may be the mode or the manner of physical importation of the goods, just as the said goods may have been imported by post. Section 28 of the Customs Act, however, enables the Government to issue notice to the persons importing the articles into India. It is by reason of the collaborators agreements that the drawings, manuals, technical material, etc., were sent by the foreign collaborators to the appellants and it is the appellants who were the importers who alone could be made liable in case of non-levy or short-levy of customs duty. The word 'importer' in Section 2(26) of the Customs Act includes the owner and as the appellants were the owners of the goods, certainly after these were received by them, it is only from them that the short-fall in duty levied could have been recovered. The parties took a chance in importing the articles through the courier. Initially they were successful in having the goods cleared by declaring a nominal value in respect thereof. They may not have been able to do this if the technical material and goods had been imported, not as a part of passengers' baggage, but in the ordinary course of import either through post or by filing bill of entry.
Thus, the facts are distinguished. In the judgment in the case of Ikea Trading Ltd., by Government of India [2003 (157) ELT 359 (GOI)], the issue was whether certain benefits can be extended where the exports were (22) Appeal No. ST/30322-30324/2016, 30526,30527,30875,30876/2018, 30447,30448/2019 through merchant exporter. However, relying on clear instruction of the CBEC dated 21.11.2001, wherein, it was permissible that rebate on input stage duty was permissible to manufacture exporter or to the merchant exporter, as the case may be, it was allowed. However, there is no such provision under the impugned notification that this rebate is also available to merchant exporter or manufacture exporter and therefore on plain reading it is obvious that this judgment is also not relevant. They have relied on catena of judgments in support that the supply of goods by the manufacturing exporter to merchant exporter also has to be considered as export of goods:
i) Sopariwala Exports Pvt Ltd., Vs Joint Commissioner {2025 (5) TMI 921 - Gujarat High Court]
ii) SK Sarawagi & Co. Pvt Ltd., Vs CCE [2020 (35) GSTL 208 (T)]
iii) SK Sarawagi & Co. Pvt Ltd., Vs CCE [2022 (4) TMI 734 - CESTAT Kolkata]
iv) Auroglobal Comtrade Vs Chairman, CBEC [2023 (34) STR 114 (T)] We note that these cases were all in relation to grant of the benefit, where the exports were undertaken by the merchant exporter. As discussed, in earlier paras, MMTC as STE cannot be considered as merchant exporter, in the facts of the case and they have to be considered only as exporter. There is no provision that MMTC can act as a merchant exporter in relation to certain goods, which were otherwise prohibited for export by the manufacture exporter. The export of 64% Fe content ore was restricted item and the only condition was that it can be exported only by STE i.e. MMTC in this case. Obviously what cannot be allowed to be exempted directly can also not be allowed so exempted initially unless there is specific provision under the relevant Act or provisions governing such restrictions. Thus, these (23) Appeal No. ST/30322-30324/2016, 30526,30527,30875,30876/2018, 30447,30448/2019 case laws also have no relevance and are distinguished. They have also relied on many judgments in support that the taxes cannot be exported.
Without going into details of this cases etc., we find that while it is a fact that taxes are not exported and some mechanism exist to reduce the tax or eliminate the taxes in respect of export goods however, this doctrine is always regulated through various measures, schemes, notifications notified by the Ministry of Finance or Ministry of Commerce etc., and there is no such general ground that merely because NMDC has paid certain service tax, it must be refunded back to him irrespective of the fact whether they have exported themselves or not. There is a provision for taking care of such situation in terms of provisions under the Central Excise Act and Rules made thereunder, read with relevant notification and if they were eligible under the same, they would have got the benefit of the same. It is obvious that for the purpose of service tax, a separate notification has been issued to allow certain rebates, however, that was restricted to only to the exporter and since they are not the exporter therefore merely because they have paid service tax in respect of goods, which were purchased by exporter and in turn exported through plea of grant rebate is not sustainable.
17. They have also taken the plea that the refund sanctioned once cannot be allowed to be irregularly sanctioned unless challenged by way of an appeal. We find that in all these judgments, essentially it has dealt with a situation where it has been held that the refund sanctioning authority again, issuing a show cause notice for erroneous refund on his own may tantamount to reviewing his own order. It is nobody's case that provision for raising demand for erroneous refund existed in the statute. In so far as the issue whether the RSA has himself has reviewed the order and again issued a show cause notice for recovery of demand of erroneous refund or there (24) Appeal No. ST/30322-30324/2016, 30526,30527,30875,30876/2018, 30447,30448/2019 has been an appeal to the earlier order vide which he has sanctioned the refund in the first instance needs to be examined. We find from the facts that in respect of three appeals, where the refunds has been sanctioned initially, there has been a review of the said sanction order and subsequent to the decision by the competant appellate authority, the refund sanctioning authority has again issued the show cause notice for recovery of erroneous refund for which he was contesting. Therefore, these judgments are also not relevant in the facts of the case.
18. In view of the above, all the appeals are dismissed.
(Pronounced in open court on ___17.10.2025___) (A.K. JYOTISHI) MEMBER (TECHNICAL) (ANGAD PRASAD) MEMBER (JUDICIAL) jaya