Custom, Excise & Service Tax Tribunal
M/S Orient Craft Limited vs Cce, New Delhi on 12 October, 2012
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Date of Hearing : 12.10.2012 Service Tax Appeal No. 581-584 of 2012 & Service Tax Appeal No. 586-589 of 2012 [Arising out of Order-in-Appeal No. 40-47/S.Tax/D.II/2012 dated 8.2.2012 passed by the Commissioner of Central Excise (Appeals), New Delhi) For Approval & signature : Honble Ms. Archana Wadhwa, Member (Judicial) Honble Shri Mathew John, Member (Technical) 1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy of the order? 4. Whether order is to be circulated to the Department Authorities? M/s Orient Craft Limited Appellants Vs. CCE, New Delhi Respondent
Appearance:
Appeared for Appellant : Shri A.K. Jain (G.M.)
Appeared for Respondent : Shri Amresh Jain, A.R.
CORAM: Honble Ms. Archana Wadhwa, Member (Judicial)
Honble Shri Mathew John, Member (Technical)
Order No.dated.
Per Mathew John :
In this proceeding eight appeals filed by the same appellant are being disposed of because they all arise from the same impugned order which disposed of eight appeals against eight orders-in-original on similar facts and issues.
2. The appellants had filed eight applications for refund of Cenvat Credit of service tax paid on specified services used in export of excisable goods which were exported out of India during the period Jan 2010 to Mar 2010. The refunds were claimed under provisions in Notification 17/2009-ST dated 07-07-2009. The adjudicating authority sanctioned part of each of the refund claims and rejected part of each claim. Aggrieved by the order of the adjudicating authority the appellant filed appeals with Commissioner (Appeal). Commissioner (Appeal) rejected the appeals. Aggrieved by the order of the Commissioner (Appeal), the appellants have filed these appeals before the Tribunal.
3. Refund claim is in respect of Cenvat credit taken against different invoices and in respect of different input services. No worksheet showing what are the invoices against which claims have been rejected and what is the reason in respect of each invoice are not seen from the impugned order. The Appellant submits that they have not been given such worksheet, though they had submitted worksheet showing invoice numbers dates and amounts claimed against each invoice.
4. On a scrutiny of the Show Cause Notice in respect of appeal No. 581/2012 it is seen that the proposed reasons for rejecting refund were given as under:
(i) No documentary evidence i.e., ledger account and bank statement has been enclosed in respect of service tax having been actually paid by the exporter claiming the exemption by way of refund of service tax.
(ii) No documentary evidence in respect of realization of sale proceeds for the goods exported have been submitted along with the refund claim.
(iii) The amount of Service Tax is either not mentioned or/and the amount claimed is found in excess of what is shown in the invoices of the service provider in few cases.
(iv) Original invoices of service providers not produced and the Bill of Lading date falls earlier than LEO date in some cases.
(v) Conditions prescribed under S. No. 2 & 5, 11 and 15 of Para 4 of Notification No. 17/2009-ST dated 7.7.09 not fulfilled by the exporter in some of the cases/service providers.
(vi) In some cases the Service Tax Registration No. is not appearing on the invoices of service providers as required under Rule 4A of the Service Tax Rules, 1994.
(vii) The service namely A/C Management Fee among the taxable services, shown to have been availed in the invoices of M/s Continental Carriers does not come in the scope of services defined in CHA category and therefore doe appear to be related to export of goods.
5. From the order of the Commissioner (Appeal) in the said case it is seen that claim has been rejected in respect of four types of input services namely,-
(i) Custom House Agents Service
(ii) Clearing and Forwarding Services
(iii) Port and Other Port Services
(iv) GTS services.
6. The reasons given for rejection are as under:
(i) In respect of the CHA and Clearing and Forwarding Service, the adjudicating authority observed that (a) some of invoices of the service providers do not specifically mention number and date of shipping bill, number and date of invoice issued by the exporter relating to export goods (b) the amount claimed is found in excess of what is shown in the invoices of service providers and such amount has been reduced accordingly (c) some of invoice of service providers are not raised as per Rule 4A of the Service Tax Rules, 1994, the appellant also did not submit original invoices of service providers.
(ii) In respect of Port and other Port Services, it was observed that there are many other services which do not appear to be port services but have also been included by the party in the present claim for refund under the category of port services. The services provided in relation to customs clearance and handling of cargo at the Inland Container Depot or at the Air Cargo Terminal provided by a CHA or a Freight Forwarder, as the case may be, to an exporter do not appear to be covered under port service as the services are not provided by port or any other person authorized by the port in relation to port services. It was found that terminal handling charges, of which refund has been claimed, after classifying them as other port services is not included in the port services or other port services listed in the relevant Board Circular No. B-11/1/2001-TRU dated 9.7.2001. Moreover, the appellant did not submit the documents of the port service provider and the CHA or the Freight Forwarder does not appear to be the person authorized by port in relation to port services.
(iii) In respect of GTA Service, the adjudicating authority observed that the invoices relating to these services have been issued by the persons who have neither provided nor were authorized to provide such services. In this connection the appellant did not submit the bills/invoices of the service providers or who were authorized to provide and who have actually provided such service and also the evidence of payment of service tax by the service providers or even to the service provider by the appellant. The appellant also did not submit the relevant copies of shipping bills from which it could be established that the services availed under the invoices of GTA and Rail Service Provider were used in the export of subject goods.
7. The appellants contentions are the following :-
(i) Regarding non-mentioning of number and date of shipping bills and number and date of the invoice of the exporter relating to export of goods. In this regard the appellant relied upon the Circular No. 120/I/2010-ST dated 19.1.2010, wherein it has been clarified that the issue regarding incomplete invoices and one to one co-relation between inputs and outputs and scrutiny of voluminous record, the departmental officers are only required to make a basic scrutiny of the documents and if found in order, sanction the refund claim within one month. Besides above the appellant submitted that the numerical invoice number is mentioned in the invoice of the service provider to correlate the documents.
(ii) Regarding activities carried within the port/airport area, the appellant submitted that Finance Bill 2010 has altered and expanded the scope of existing services and made other significant changes in the definition of Port and Other Port services. The definitions of the relevant taxable services are being amended to clarify that all services provided entirely within the port/airport premises would fall under these services. Further, specific authorization from the port/airport authority would now not be precondition for the levy.
(iii) The Assistant Commissioner has issued a general SCN besides the appellant had submitted all the requisite documents viz. ledger accounts, bank Realization Certificate (BRC), Original service provider invoices and certification as per clause f of para 2(i) of Notification No. 17/2009-
ST dated 7.7.2009.
(iv) The Assistant Commissioner has not alleged any discrepancies in respect of Port and Other Port services and GTA Services in the SCN whereas while passing the impugned order he has traveled beyond the scope of allegations contained in the SCN.
(v) They relied upon the order passed by the Commissioner of Central Excise (Appeals), Delhi-II in the case of M/s Orient Craft Ltd. vide Order No. 142-149/S.Tax/D-II/2011 dated 23.3.2011.
8. The Authorized representative for appellant submits that most of the objections raised are of a curable nature and he will be in a position to demonstrate how the bills raised by CHA and C & F Agents relate to the exported goods. Since all the documents record the container number in which goods are exported. He further points out that the issue as to whether the terminal handling charges would qualify to be considered as Port Services has been decided by the Tribunal in Western Agencies Vs. CCE Chennai- 2011 (22) S.T.R. 305 (Tri. LB). Further against item 16 in the notification 17/2009-ST, refund for Cenvat credit in relation to service tax paid on services commonly known as terminal handling charges is to be granted irrespective of the classification of services under different clauses of section 65(105) of Finance Act, 1994. So prima facie there is a misapplication of law for rejecting refund claims relating to such amounts.
9. He also points out that in respect of claims for the period 01/09 to 12/09 the Commissioner (Appeal) vide his order dated 01-11-11 allowed refund claims rejected by adjudicating authority on similar grounds. He submits that there is no reason to have a different approach while deciding these refund claims.
10. The Ld. A. R. for Revenue submits that the appellants had not complied with the conditions prescribed in the notification for grant of refund and that was the reason why the claims were partially rejected. He submits that where refund claims have been allowed by order dated 1-11-2011 such defects might not have existed or might have been cured. The impugned claims have to be seen independently with reference to conditions prescribed in the notification. He prays that the appeal may be dismissed, since the appellants are not able to satisfy the conditions in Notification No. 17/2009-ST.
11. We have considered arguments on both sides. Prima facie we find good reason for re-consideration of the claims at least as far as it relates to port services with reference to the entry at S.No. 16 of Notification No. 17/2009. In respect of many other amounts the defects pointed out appear to be curable defects. We also find that there is lack of clarity as to which amount has been rejected for which reason. In the absence of such precise findings it is difficult to finally decide the appeal in the Tribunal. So we are remanding the matter for reconsideration of the claims to the extent it stand rejected by the lower authorities.
12. During de-novo proceedings, it is necessary that the appellant is put on notice as to which are the invoices against which claim for refund is proposed to be rejected and for what reasons. For convenience, the appellant, in pursuance of this order, will make his further submissions and the documents he proposes to rely on to substantiate his claim before the adjudicating authority. It may be convenient if the adjudicating authority firstly scrutinizes the matter once again with reference to such documents and submissions. Thereafter if any amounts are proposed to be rejected, a Show Cause Notice specifying the amounts which are proposed to be rejected showing the individual amounts proposed to be rejected giving its identifiers and the reason for rejection of each amount may be issued and thereafter a personal hearing may be conducted and the matters decided.
13. This all the appeals are allowed by remanding the matter for de-novo decision by adjudicating authority.
(Pronounced in Court) Archana Wadhwa (Judicial Member) Mathew John (Technical Member) RM