Custom, Excise & Service Tax Tribunal
M/ Ginni International Ltd vs Cce, Jaipur on 3 March, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. II DATE OF HEARING : 03/03/2016. DATE OF DECISION : 03/03/2016. Service Tax Appeal No. 954 of 2009 [Arising out of the Order-in-Appeal No. 97 (DK)/ST/JPR-I/2009 dated 04/09/2009 passed by Commissioner (Appeals), Central Excise, Jaipur.] For Approval and signature : Honble Shri Ashok Jindal, Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) 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 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/ Ginni International Ltd. Appellant Versus CCE, Jaipur Respondent
Appearance Ms. Neha Meena, Advocate for the appellant.
Shri Ranjan Khanna, Authorized Representative (DR) for the Respondent.
CORAM: Honble Shri Ashok Jindal, Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) Final Order No. 51002/2016 Dated : 03/03/2016 Per. B. Ravichandran :-
The present appeal is against order dated 04/09/2009 of Commissioner (Appeals-I), Jaipur. The appellants are engaged in the manufacture and export of carton yarn. They filed a claim for refund of service tax in terms of Notification No. 41/2007-ST dated 06/10/2007 for the period July 2008 to September 2008. The refund is claimed on the ground that they have paid service tax on various services received by them and used for export of goods manufactured by them. The claim was decided vide order-in-original dated 26/2/2009. Out of Rs. 3,59,488/- an amount of Rs. 2,86,403/- has been allowed as refund and an amount of Rs. 73,085/- has been rejected by the Original Authority. On appeal, the Commissioner (Appeals) vide the impugned order rejected their appeal. Aggrieved by this order, the appellant filed the present appeal.
2. It was submitted by the learned Counsel for the appellant that an amount of Rs. 73,085/- was rejected on the ground that they have claimed refund under the category of Port Services whereas the services received by them falls under various categories like Documentation Charges, Terminal Handling Charges, Bill of Leading Fee which are not classifiable under Port Services. The learned Counsel contended that the CBEC vide Circular dated 09/7/2001 clarified the scope of Port Services. From the said clarification it is clear that Container Handling Charges, Transshipment Wharefage on Containers, Equipment Charges for Handling Containers, Storage Charges for such containers fall under the category of Port Services. It may be appreciated that Terminal Handling Charges are nothing but the charges collected by the Port for handling and/or loading of containers in the vessel for export. These are collected by the Port Authorities from the shipping lines who get this reimbursed either from the freight forwarders or from the exporters. These are Port Charges only. It is claimed that from the nature of service received by the appellants it is clear that the Terminal Handling Charges are only Port Charges which are covered under Port Services, accordingly eligible for refund.
3. The learned AR contended that Notification No. 41/2007-ST specifies the taxable services which are eligible for exemption. If the taxable services are not falling under any of the classification mentioned in the Schedule of the notification, the exemption and consequently refund cannot be granted to the appellant.
4. We have heard both the sides and examined the appeal records. The point for decision is the eligibility of the appellant for exemptions/refund of service tax paid by them with reference to export of their goods. The dispute is relating to correct classification and categorization of the impugned services. The learned Commissioner (Appeals) observed that the service providers have not classified these services under Port Services in their bills/ invoices. In fact most of the service providers have not shown classification of service. The learned Commissioner (Appeals) also observed that the service tax claimed as refund should have been paid to the Government by the service provider under Port Services. We find that such condition is not figuring in the notification. Notification only stipulates that the exporter claiming exemption should have actually paid the service tax on the specified services. The appellant will pay service tax only to the service provider. Further, regarding the categorization of service, we find the CBEC vide Circular dated 12/3/2009 clarified as below :-
Notification No. 41/2007-ST provides exemption by way of refund from specified taxable services used for export of goods. Granting refund to exporters, on taxable services that he receives and uses for export do not require verification of registration certificate of the supplier of service. Therefore, refund should be granted in such cases, if otherwise in order. The procedural violations by the service provider need to be dealt separately, independent of the process of refund.
5. In the present case, we find the services on which the appellant claimed refund were all the nature of Port Services and any procedural infirmity in documentation should not be held against a substantial benefit, if otherwise eligible, to the appellant. In SRF Ltd. vs. CCE, Jaipur I reported in 2015 (40) S.T.R. 980 (Tri. Del.) it was held that the services involved are connected to export of goods and the appellant had paid service tax on such services. The nature of services if are to be considered as Port Services, the refund should not be rejected. The objection of the Revenue that the service provider should have paid service tax under Port Services was not accepted by the Tribunal. The Tribunal observed that the exporter should not be unduly burdened with a condition to establish that the service provider was registered under Port Services. After relying on the various decided cases, the Tribunal held in favour of the appellant for claiming refund under the above said notification. The Honble Gujarat High Court in CCE vs. AIA Engineering Pvt. Ltd. reported in 2014 (36) S.T.R. 1236 (Guj.) examined similar matter with reference to later amendment carried by Notification No. 17/2009-ST and held in favour of the appellant on the entitlement of refund claim. Reliance also can be placed on Tribunal decisions in Devarsons Industries P. Ltd. vs. CCE, Ahmedabad II reported in 2014 (33) S.T.R. 197 (Tri. Ahmd.), CCE, Belapur vs. Pratap Re-Rolling Pvt. Ltd. reported in 2014 (34) S.T.R. 868 (Tri. Mumbai) and Macro Polymers Pvt. Ltd. vs. CCE, Ahmedabad reported in 2010 (19) S.T.R. 679 (Tri. Ahmd.).
6. Considering the above discussion and analysis, we find the rejection of refund as upheld by the impugned order is not sustainable. Accordingly, we allow the appeal with consequential relief.
(Operative part of the order pronounced in the open court.) (Ashok Jindal) Member (Judicial) (B. Ravichandran) Member (Technical) PK ??
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