Custom, Excise & Service Tax Tribunal
The Commissioner vs M/S Bellary Iron Ores(P)Ltd on 3 November, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench Single Member Bench Court I Appeal No. ST/638 & 639/2008 (Arising out of Order-in-Appeal No.37&38/2008(T)ST, Dated 30-09-2008 passed by Commissioner(Appeals), C.CE&ST, Guntur ) For approval and signature: Honble Ms. Sulekha Beevi, C.S., Member (Judicial) 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 should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? The Commissioner C.CE&ST,Tirupati ..Appellant(s) Vs. M/s Bellary Iron Ores(P)Ltd. ..Respondent(s)
Appearance Shri Arun Kumar, AR for the Appellant.
None for the Respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member (Judicial) Date of Hearing: 03/11/2016 Date of Decision: 03/11/2016 FINAL ORDER No.A/31260 & 31261/2016 [Order per: Sulekha Beevi, C.S.]
1. The above appeal is filed by department, challenging the order passed by the Commissioner(Appeals), who set aside the order passed by original authority rejecting granted the refund claim filed by the respondents. On behalf of the department, the Ld. AR, Shri Arun Kumar reiterated the grounds of appeal and submitted that the finished goods exported by the respondent are exempted from payment of excise duty vide Notification No.4/2008-CE-dated 01-03-2006 issued under Section 5A of Central Excise Act,1944. That the impugned goods being exempted goods were exported by appellant who are 100% EOU. That therefore, the provisions of rule 6(6) Cenvat Credit Rules, 2004 is not applicable and respondents are not eligible to take credit on service tax paid on input services, that therefore, the question of granting refund does not arise. Further, that Notification No.40/2007-ST dated 17-09-2007 which was superseded by Notification No.41/2007-ST darted 06-10-2007 has been based upon by the Commissioner(Appeals) for granting refund and the same is wrong as the said notification came into force only on 17-09-2007, whereas, the period involved is from 01-04-2006 to 30-09-2007. That as per this notification, the service tax is refunded and not the credit. That the respondent is therefore not eligible to take credit or get refund of the unutilised credit.
2. The respondent has filed cross objections. In the said cross objection, it is seen that respondent is 100% EOU and is not able to utilise the credit availed. The respondent has stated that the Cenvat credit could not be denied to them merely on the ground that the goods are not exported under bond, as per Central Excise Rules, 2002. Since the respondent is operating as 100% EOU and had exported the goods under EOU bond, they are eligible for credit, have also relied upon the decision rendered by Tribunal in the case of ANZ International Vs Commissioner of Customs, Bangalore [2008 (224)ELT-573 (Tri. Bang). The same view was maintained by the High Court of Karnataka in the appeal filed by the department, as reported in 2009(233)ELT-40( KAR). The observations of the Commissioner (Appeals) in this regard is noteworthy.
Further, I noticed that the disputed input services were notified vide notification number 40/2007-ST dated 17-09-2007, superseded by notification No.41/2007-ST dated 06-10-2007, to become eligible for refund of service tax. Thus, harmonious reading of the Boards instructions with other statutory provisions it becomes evident that persons who export goods are entitled for refund of service tax paid on input service provided, there is no scope for them to utilise the same. The boards instructions are consistent with the policy and the intention of the legislature to give relief of the incidence of taxes paid on export of goods and one such scheme is contained in Rule 5 of Cenvat Credit Rules, of 2004. In the instant case, earning of the foreign exchange and utilisation of input services are not under dispute and hence the appellant become eligible for refund of accumulated input service credit. As a result, rejection of the said refund claims by the lower authority does not sustain.
In Cauvery Stones Impex(P)Ltd Vs CCE, Salem 2010(257)ELT-151 (Tri.Mad), the issue whether 100% EOU is eligible for refund of input service(GTA) was held in favour of assessee. The Tribunal in the case of Neo Foods Pvt.Ltd. Vs Commissioner of Customs (Appeals), Bangalore [2009 (242)ELT-562 (Tri.Bang) have analysed and discussed the issues in detail. The tribunal in the said case held that Rule 6(6)(v) would be covering even all exports of final products by a 100% EOU and therefore, would not be hit by Rule 6(1) as far the eligibility of Cenvat credit on input/input services used in manufacture of final products exported by a 100% EOU is concerned. Following the same, I do not find any infirmity in the impugned order. The appeal is dismissed.
(Dictated & Pronounced in open court) (SULEKHA BEEVI C.S.) MEMBER(JUDICIAL) dks.
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