Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs M/S. Vibhutigudda Mines Pvt Ltd on 18 September, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/857/2009-SM [Arising out of Order-in-Appeal No. 304/2009 dated 24/07/2009 passed by the Commissioner of Central Excise (Appeals), Mangalore.] Commissioner of Central Excise, Customs and Service Tax BELGAUM NO. 71, CLUB ROAD, CENTRAL EXCISE BUILDING, BELGAUM, - 590001 KARNATAKA Appellant(s) Versus M/s. VIBHUTIGUDDA MINES PVT LTD. MODI BHAVAN ,60/356A, HOSPET ROAD, ALLIPUT BELLARY. Respondent(s)
Appearance:
Mr. Naveen Kushalapppa, AR For the Appellant Mr. G.H. Pradhymna, Advocate For the Respondent Date of Hearing: 18/09/2017 Date of Decision: 18/09/2017 CORAM:
HON'BLE SHRI M.V.RAVINDRAN, JUDICIAL MEMBER Final Order No. 22062 / 2017 Per : M.V.RAVINDRAN This appeal is filed by the Revenue against Order-in-Appeal No.304/2009 dated 24.7.2009.
2. Heard both sides and perused the records.
3. On perusal of the records, it transpires that the issue is regarding refund of service tax paid on the various services utilized by the respondent for extraction of iron ore and fines and exporting the same. The adjudicating authority was of the view that these services are not used in or in relation to providing of any output services and respondent is not a manufacturer and hence, CENVAT credit availed and refund claim, thereof, does not arise; on an appeal, the first appellate authority has set aside the Order-in-Original and allowed the appeal.
3.1 The Revenues contentions in this appeal is that the appellant being not a service provider could not have used the input services and availed the CENVAT credit and subsequently, claim refund of the same.
4. The learned counsel submits that similar issue has been decided by the Honble High Court of Karnataka in the case of Commissioner of Customs, Bangalore vs. ANZ International: 2009 (233) ELT 40 (Kar.).
5. I find that the services on which the first appellate authority has held that the respondent is eligible for the service tax credit are:
(i) Technical inspection and Certification Service
(ii) Security Agencys Service
(iii) Management, Maintenance or Repair service
(iv) Telecommunication Service
(v) Chartered Accountants service
(vi) Courier Services
(vii) Port Services
(viii) Renting of immovable property service
(ix) Transport of goods by road service It can be seen from the above reproduced services that these services are used in or in relation to the extraction of iron ore which are exported by the respondent. I do find strong force in the contentions raised by the learned counsel that the decision of the Honble High Court of Karnataka in the case of ANZ International (supra) is in favour of the respondent. The facts of the case as recorded by the Honble High Court of Karnataka and the ratio thereof are reproduced herein below:
2.?The ground of attack of the impugned order is that the CESTAT has committed an error in law in not appreciating the fact that the products being manufactured by the claimant which are chargeable to NIL rate of duty by the Tariff itself and the Cenvat credit can be allowed in terms of the provisions of CGR and not otherwise (by way of referring to other concessions available to EOU subject to final orders) and further contended that another ground in support of the substantial question framed in this appeal is that the CESTAT has misconceived the provisions of Rule 6(6) of Cenvat Credit Rules, 2004 (for short the Rules in applying the same to the facts of the case by interpreting the provisions of sub-rule (1) of Rule 6 which has no application and the reasons assigned in applying Rule 6 is not only erroneous but bad in law and therefore requested to answer the question in favour of the Revenue.
3.?With reference to the above said grounds urged in this appeal, we have carefully examined the same to find out as to whether the aforesaid substantial question of law would arise or not for our consideration in this Appeal. The CESTAT, having regard to the undisputed fact that the respondent is 100% Export Oriented Unit (for short ECU) in respect of which, benefit of CENVAT Credit Rules, 2004 is available for the inputs which will be used for manufactured goods of 100% export. Therefore, the Tribunal has applied Rule 6(6) and recorded the reasons stating that there is a provision of exporting the goods under bond. In the case of 100% EOUs, the input can be imported free of duty and they can obtain indigenously also free of duty. When duty is paid on the inputs, then the appellants are entitled for the Cenvat credit facility under the Rules Cenvat Credit Rules. There is nothing in the Rules which prohibits 100% EOUs availing Cenvat credit. Rule 5 of the said Rules provides for refund of Cenvat credit availed by the exporter where they do not utilize the goods as inputs for manufacture of 100% export. The case on hand is the precise case wherein the respondent has availed the Cenvat credit facility. They were not in a position to utilize the credit, they applied for refund of the Cenvat credit availed by them. The reason is that all their products were exported and there was no domestic clearance. Therefore, in terms of Rule 5 of the Rules, they are riglitiy entitled for the refund of the duty paid to the department. The learned counsel for the appellant has pointed out that in the case of Sterlite Opitcal Technologies Ltd. v. CCE, Aurangabad - 2006 (201) E.L.T. 428 (Tri.-Mumbai), wherein it is held that letter of undertaking accepted in lieu of bond for export even though finished goods were exempted, refund of Cenvat credit on inputs and packing materials are admissible in terms of Rule 5 of the Rules. Therefore, the Tribunal has held that 100% EOU is entitled to take Cenvat credit on the duty of the inputs procured indigenously and when they were not in a position to utilize the same, they are entitled for the benefit of the refund under Rule 5 of the Rules. Therefore, the orders impugned in the Appeal before the CESTAT held to be bad in law and the same were set aside. Therefore, we do not find that no substantial question of law does arise in this Appeal for our consideration to answer the same in favour of the Revenue. Accordingly, the appeal is devoid of merits and therefore it must fail and is dismissed. It is also noted that the said judgment of the Honble High Court has been upheld by the apex court as reported at 2009 (240) ELT A16 (SC). Since similar issue is already decided by the jurisdictional High Court and upheld by the apex court, I find that the appeal is devoid of merits and is rejected.
(Order dictated in Open Court on 18/09/2017) M.V.RAVINDRAN JUDICIAL MEMBER rv 5