Custom, Excise & Service Tax Tribunal
M/S. Sb Logistics vs Commissioner Of Central Excise, ... on 13 July, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Application(s) Involved: ST/Stay/27608/2013 in ST/27299/2013-DB Appeal(s) Involved: ST/27299/2013-DB [Arising out of Order-in-Original No. 22/2013 (Commr.) dated 29/04/2013 passed by Commissioner of Central Excise and Service Tax, BELGAUM.] For approval and signature: HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE SHRI ASHOK KUMAR ARYA, TECHNICAL MEMBER 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? Yes 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes M/s. SB Logistics Opp. Dwarkamal Residence, Beside Gugri Umesh Advocate, Amravathi, Behind Judge Quarters, HOSPET 583 201. KARNATAKA Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax BELGAUM NO. 71, CLUB ROAD, CENTRAL EXCISE BUILDING, BELGAUM 590 001. KARNATAKA Respondent(s)
Appearance:
Mr. M. S. Nagaraja, & Mr. Basha, Advocates HIRAGANGE & ASSOCIATES #1010, 1st floor(Above Corp. Bank) 26th Main, 4th T Block, Jayanagar, Bangalore - 560041 Karnataka For the Appellant For the Respondent Mr. N. Jagadish, Superintendent (AR) Date of Hearing: 13/07/2015 Date of Decision: 13/07/2015 CORAM:
HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE SHRI ASHOK KUMAR ARYA, TECHNICAL MEMBER Final Order No. 21548 / 2015 Per : ARCHANA WADHWA After dispensing with the condition of pre-deposits, we proceed to decide the appeal itself inasmuch as we are convinced that the matter needs to go back to the Commissioner for fresh adjudication. The appellant is an exporter of iron ore and avails the services of various persons. They are also registered with the service tax department under the category of Goods Transport by Road service and as recipient of the said services, is required to discharge his service tax liability on reverse charge basis.
2. Demand of around Rs.7.21 crores stands confirmed against the applicant/appellant as his service tax liability along with confirmation of interest and imposition of penalties. The said demand is on various counts. We will be dealing with the various categories and issues under which the demands stand confirmed by the original adjudicating authority.
2.1 Demand to the extent of Rs.5,46,543/- stands confirmed against them for the period April 2009 to June 2009 on the findings that the appellant as recipient of GTA services was required to pay service tax. The appellants plea as regards the exemption from payment of service tax in terms of Notification No.41/2007-ST stands rejected by the adjudicating authority.
2.1.1 We have gone through the said Notification and find that the same provides exemption to the taxable services specified therein which stands received by an importer and used for export of goods. However, the said exemption is not available to the service provider i.e., one who has provided the service to the exporter and he is required to discharge his service tax liability. The said service tax paid by the service provider to the exporter is available to the exporter as refund of the same. For better appreciation, relevant part of the Notification is being reproduced below:
2. The exemption contained in this Notification shall be given effect to in the following manner, namely;-
(a) the person liable to pay service tax under sub-section (1) or sub-section (2) of Section 68 of the said Finance Act shall pay service tax as applicable on the specified services provided to the exporter and used for export of the said goods, and such person shall not be eligible to claim exemption for the specified services:
Provided that where the exporter of the said goods and the person liable to pay service tax under sub-section (2) of section 68 for the said services are the same person, then in such cases exemption for the specified services shall be claimed by that person; When the above part of the Notification was brought to the notice of the adjudicating authority, he referred to only the main portion of clause 2(a) and held that the exporter is first required to pay the service tax and to claim the refund subsequently. However, we find that as per proviso to said clause 2(a) if the person who is liable to pay the service tax is also the exporter of the goods, the exemption for the specified services shall be claimed by that person only. The issue which arises is as to whether the exemption claimed by the exporter, who is also required to pay service tax on GTA services, on reverse charge basis is also to follow the procedure prescribed under Clause 2(a) of the Notification. The adjudicating authority has observed and the learned DR appearing for the Revenue has also pressed the point that such exemption can be claimed only by filing refund claim. The proviso to said clause does not grant blanket exemption to the exporter.
2.1.2 After carefully considering the said stand of the assessee as also the submissions made by the learned DR, we are of the view that if the exporter, who is also required to pay the service tax is the same person, then the exemption can be claimed by the said person himself. First paying service tax and immediately thereafter claiming refund of the same by the same person, i.e., exporter apart from creating a revenue-neutral situation, does not seem to be legislative intent. If the interpretation as given by the adjudicating authority is accepted, then the said proviso would become redundant and otiose inasmuch as the Revenues stand would be covered by the main clause of the Sl. No. 2(a) and there was no requirement to add the proviso. It is well settled law of interpretation that the interpretation which renders the provision of law otiose or redundant has to be avoided. Inasmuch as the Commissioner has simpliciter rejected the appellants contention by referring to Para 2(a) without expressing any opinion on the proviso of the said clause to the Notification, we deem it fit to remand the matter for his consideration of the said proviso. We also note that vide Service Tax Trade Notice No.05/2009 dated 29.6.2009, the said clause of Notification No.41/2007 dated 29.6.2009 stand clarified by the Department. Though the attention of the adjudicating authority was drawn to the said Trade Notice issued by the Department, he has not deemed it fit to refer to the said Trade Notice. As such, for all the above reasons, we deem it fit to set aside the impugned order and remand the matter.
2.2 Further an amount of Rs.6.18 crores approximately, which stands confirmed in respect of the GTA services received during the period July 2009 to March 2011 is by rejecting the benefit of exemption Notification No.18/2009-ST. On going through the said Notification, we find that the same grants exemption to various services availed by an exporter, subject to the conditions annexed therewith. As per the said condition, the exporter is required to inform his jurisdictional Central Excise officers in Form EXP1 before availing the said exemption. There is no dispute about fulfilling the said condition of the Notification. Further, the exporter is also required to file the returns in Form EXP2 every six months of the financial year within 15 days of the completion of the said six months. The EXP2 returns relates to the fact of actual export of the goods. The adjudicating authority has referred to one such instance in respect of EXP2 filed for the half yearly ending on 30.9.2009 and has referred to an invoice dated 23.10.2009 which stands mentioned in the said EXP2. Learned advocate clarifies that EXP2 was filed by them for the half yearly ending on 30.9.2009 but as the bill was not raised by them, the invoice column was left blank. It was only subsequently under the instructions of the Range authorities that the bill dated 23.10.2009 was included/substituted in the said returns. In such a scenario, the observations of the adjudicating authority that inasmuch as the bill dated 23.10.2009 was mentioned in the return up to September 2009, there seems to be after thought on the part of the assessee, thus making them ineligible for the benefit of the Notification in question.
2.2.1 Apart from the fact that based upon one such instance, the benefit of Notification cannot be denied for the whole period, we also agree with the learned advocate that it is the fact of the exports having taken place till 30.9.2009 which is required to be established for the purpose of extending the benefit of the Notification. If the invoices stand raised subsequently and was mentioned in the said returns at the instance of the Revenue, the benefit of the Notification cannot be denied on the said ground. As per the learned advocate, all the shipping bills for the period in question stand mentioned in the EXP2 and the adjudicating authority is also not disputing or denying the fact of export inasmuch as he has accepted the BRCs issued by the banks, thus establishing the fact of export. The adjudicating authority has not, in fact, examined the issue from the said angle and has also not examined the other documentary evidences available on record so as to establish the fact of export. We deem it fit to remand the said issue also to the Commissioner for fresh decision.
2.3 We further note that the appellant has already deposited an amount of Rs.60,79,600/- and Rs.8,86,359/- relatable to the transportation charges pertaining to transportation services to other exporters and inter-carting charges in the mines. The learned advocate submits that they are also challenging the said confirmations, and inasmuch as the matter is being remanded, the said issues be kept open before the adjudicating authority for fresh consideration. We order accordingly.
2.4 A part of the demand to the extent of Rs.28,97,304/- stands confirmed for the period April 2010 to March 2011 under the category of Mining of Mineral Oil and Gas service. Learned advocate submits that apart from the fact that the services undertaken by them being crushing of mine ore and loading of the same would not get covered by the mining services, as held by the Tribunal in number of decisions, they have actually not received the consideration till date from their service recipients, in which case the demand cannot be confirmed against them. Inasmuch as the matter is being remanded, the appellant is at liberty to raise the above submissions before the adjudicating authority for his consideration.
3. Stay petition as also appeal gets disposed of in above manner.
(Order pronounced in open court) ASHOK KUMAR ARYA TECHNICAL MEMBER ARCHANA WADHWA JUDICIAL MEMBER rv 6