Custom, Excise & Service Tax Tribunal
Ms Uttam Sucrotech International ... vs Ce & Cgst Noida on 30 May, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.I
Service Tax Appeal No.70169 of 2021
(Arising out of Order-in-Appeal No.-NOI-EXCUS-001-APP-944-20-21, dated -
08.02.2021 passed by Commissioner (Appeals) CGST, Noida)
M/s Uttam Sucrotech International Pvt. Ltd. .....Appellant
(H-194, Sector-63,
Noida, Uttar Pradesh 201306)
VERSUS
Commissioner of CGST, Noida ....Respondent
(C-56/42, Sector-62,
Noida-201301, U.P.)
APPEARANCE:
Shri Rakshit Verma, Advocate for the Appellant
Shri Santosh Kumar, Authorized Representative for the Respondent
CORAM: HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL)
FINAL ORDER NO.-70371/2024
DATE OF HEARING : 30.05.2024
DATE OF DECISION : 30.05.2024
SANJIV SRIVASTAVA:
This appeal is directed against the Order-In-Appeal No.
NOI-EXCUS-001-APP-944-20-21, dated 08.02.2021 passed by
Commissioner (Appeals) CGST, Noida. By the impugned order
Commissioner (Appeals) has upheld the rejection of refund claim
filed by the appellant in terms of Rule 5 of the CENVAT Credit
Rules, 2004 for the quarter October 2014 to December 2014
observing as follows:-
"6. As stated above, issue relates to rejection of refund
claim of Rs.9,07,640/- filed by the appellant in respect of
unutilized Cenvat Credit of Service Tax involved on input
services claimed for providing output services during the
period Oct 2014 to Dec 2014. The said claim was filed by the
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appellant under Rule 5 of Cenvat credit Rules, 2004 read
with Notification No.27/2012-CE(NT) dated 18.06.2012 on
account of accumulated Credit of Service Tax used for export
of services. Since the present dispute relates to export of
services, I find it prudent to first discuss, whether or not, on
the basis of documentary evidences on records, it can be
inferred in the present case that the export of services has
actually taken place.
7. I find that the adjudicating authority has rejected the
entire claim on the ground that in their half yearly return
(ST-3) for the period October-2014 to March-2015, has not
shown value of output services exported during the quarter
October-2014 to December-2014, and in such a scenario, it
cannot be ascertained as to whether output services were
actually exported or not as claimed by the appellant and
whether payment of said services was received by the
exporter. On the other hand, appellant in the appeal
memoranda has stated that it was a clerical mistake on their
part and it can not become a ground to altogether reject the
refund claim when the export of service and receipt of
payment in foreign exchange is not in doubt.
8. In view of the aforesaid background, I find it utmost
necessary to examine that whether or not in present case
export proceeds in question have been received by the
appellant or not. On going through the show cause notice
dated 29.02.2016, I observe that the said notice mentions
that "the copies of FIRCs enclosed by the party pertain to
the year 2011 whereas the export invoices were issued on
17.10.2014. The appellant has not enclosed any document
to establish that the said amount was received in advance in
connection with the abovementioned services". Ongoing
through the impugned OIO, 1 further observe that no
clarification in this regard is submitted by the appellant
before the adjudicating authority. I also find that in the
"grounds of appeal" at para C-2, appellant has stated that "it
is pertinent to note that such current account no, is also
reflected in the FIRCs in which the adjudicating authority has
pointed out discrepancy of address". After saying so,
appellant has submitted copies of the said two FIRCs under
reference (refer Annexure 7 to the Form of Appeal). On
going through the said FIRCs, I observe that both the said
FIRCS bearing payment reference по. 0480311ΤΡΟ184430
0480311TP0184431 issued by State Bank of India are dated
26.09.2011. I am therefore, of the considered opinion that
there is enough force in the argument made in the show
cause notice that the copies of FIRCs enclosed by the
appellant pertain to the year 2011 whereas the export
invoices were issued on 17.10.2014, which is not possible, in
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other words, said FIRCs can not pertain to the present
refund claim.
9. After observing so, I pay my attention to the condition
of Para 3(d) of Notification No.27/2012-CE (NT) dated
18.06.2012, which provides that
"The applicant shall file the refund claim along with the
copies of bank realization certificate in respect of the
services exported."
10. I find that the language used in the said notification is
"shall" (emphasis supplied). Therefore, I find that the
submission of relevant Bank Realization Certificates along
with the refund claim is a substantive condition to allow
refund under notification no. 27/2012- CE (NT) dated
18.06.2012. In terms of said notification, failure of appellant
to submit relevant BRCs along with the claim cannot be
termed as procedural or technical lapse. In the
circumstances of the case, availability and submission of
relevant BRCs at the time of submission of claim becomes
more important & of vital importance because due to the
failure of the appellant to show the alleged said export of
service in statutory ST-3 returns only relevant BRCs could
have established the genuineness of said export of services
and realization of payment thereof."
2.1 The appellant is engaged in providing taxable service
namely Erection, commissioning and Installation Services' &
'Business Auxiliary Services'. They are availing facility of Cenvat
credit in respect of input services being used for providing output
services under the Cenvat Credit Rules, 2004.
2.2 Appellant filed a refund claim for Rs.9,07,640/- claiming
refund of unutilized Cenvat credit in terms of Rule 5 of Cenvat
Credit Rules, 2004 read with Notification No.27/2012-CE(NT)
dated 18.06.2012. The said refund claim was objected by the
Revenue and the show cause notice dated 29.02.2016 was
issued to them stating as follows:-
"4. Whereas, further during the scrutiny/verification of
documents enclosed with the said refund claim, it was
observed that the registered address of the party as per ST-
2 Certificate is H-194, Sector-63, Noida and the party is
issuing invoices for export of services from the said address
whereas in attested copies of Inward Remittance Advice (I.e.
BRC/FIRC) enclosed with the refund claim, the address of
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Service Tax Appeal No.70169 of 2021
the party is mentioned as KD-53A, Kavi Nagar, Ghaziabad
which is not the registered address of the exporter of
services at the relevant time. It appears that services were
exported by the party & payment was received by some
other entity, which contravenes the conditions laid down in
Notification No. 27/2012-CE (NT) dated 18.06.2012.
5 Whereas Para-3(d) of Notification No. 27/2012-CE (NT)
dated 18.06.2012 lays down procedure for filing the refund
claim. As per Para-3(d) of the sald Notification
(d) The applicant shall file the refund claim along with the
copies of bank realisation certificate in respect of the
services exported."
6 in the instant case, the registered address of exporter of
services is H-194, Sector-63, Noida whereas the inward
Remittance Advice/BRC/FIRC issued by the Bank are
addressed to KD-53A, Kavi Nagar, Ghaziabad which shows
that actually the exporter of services/applicant has not
received payment for services exported & filed the refund
claim without copies of proper & relevant BRCs in respect of
services exported & thus failed to comply with conditions of
Para 3(d) of Notification No.27/2012-CE (NT) dated
18.06.2012 and therefore, the refund does not appear to be
admissible to them and is llable to rejection.
7 The party has filed the half yearly return in the specified
form Le. ST-3 return for the period October-2014 to March-
2015 on 22.04.2015. On perusal of said ST-3 return, it is
found that the party has not shown value of output services
exported during the quarter October- 2014 to December-
2014 & it cannot be ascertained from the relevant statutory
records that output services were actually exported or not as
claimed by the party and whether payment for the said
services was received by the exporter of services or not.
Moreover, the copies of FIRCs enclosed by the party pertain
to the year 2011 whereas the export invoices were issued on
17.10.2014. The party has not enclosed any documents to
clearly establish that the said amount was received in
advance in connection with the abovementioned services."
2.3 The refund claim was rejected by the Original Authority
stating as follows:-
" The other issue/allegation is that as per ST-2 Certificate,
registered address of the noticee is "H 194, Sector-63,
Noida" and they are issuing invoices for export of services
from the said address. whereas in attested copies of Inward
Remittance Advice (Le. BRC/FIRC) enclosed with the instant
refund claim, their address is mentioned as "KD-53A, Kavi
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Service Tax Appeal No.70169 of 2021
Nagar, Ghaziabad" which is not their registered address. In
this regard, submission made by the noticee is that their
company has taken the business of proprietorship firm ile.
Uttam Sucrotech Internationat in the year 2006 and address
of that company was "KD-53A, Kavi Nagar, Ghaziabad" as
mentioned on BRC/FIRC; after taking over the said business,
the noticee approached their concerned Banker for updating
the relevant details in the Bank's records, but due to some
technical problems at the Banker's end, it could not be
updated completely, although in the relevant Bank
Statements, the address of noticee is mentioned as 16-194
Sector-63, Noida
I find that the noticee has interalis admitted the alleged
discrepancy or difference in the aforesaid vital documents
Le. BRC/FIRC The Inward Remittance Certificates ie.
BRCS/FIRCs were not bearing their proper address
registered address is "H-194, Sector-63. Noida, which
indicates that although the services were exported by the
party, but the payment was received by some other entity
Such wrong mention of the noticee's registered address in
BRCs/FIRCs, ientamounts non-furnishing of Foreign Inward
Remittance Certificates (FIRCs). These facts indicate that the
noticee failed to comply with conditions of Para 3(d) of
Nisification No.27/2012-CE (NT) dared 18.06.2012. which
provides that "The applicant shall file the refund claim along
with the copies of bank realization certificate in respect of
the services exported in this contest, I place reliance upon
the Hon'ble CESTAT's judgement in the case of Kobelco
Machinery India (P) Ltd. Vs. CCE, 2017 (3) GSTL 260 (Tri-
Kol.), wherein it has been held that in the event of non-
furnishing of proper 'Foreign Inward Remittance Certificates
(FIRCs), refund claim of service tax paid on input services
used for export of goods/services (refund claim under Rule 5
of Cenvat Credit Rules, 2004 read with Rule 3 of Export of
Services Rules, 2005 and Notification No. 4/2006-CE) will
not be admissible to the appellant assessee In this regard, I
also place reliance upon the Govt. of India (Revisionary
Authority)'s order in the case of Indian Oil Corporation Ltd.,
2014(314) ELT 986 (GOI), according to which the
Government (Revisionary Authority) upheld the
Commissioner (Appeals)'s stand of rejection of refund/rehate
claim of duty the similar ground of discrepancy in export
documents. In the said case of Indian Oil Corporation Ltd.,
the Government has relied upon the judgement of the
Hon'ble Supreme Court in cave of Mis. Indian Aluminium Co.
[1991 (55) E.L.T. 454 (S.C) and Hon'ble Tribunal in case of
Mis. Avis Electronics, wherein it has been held/observed that
when provisions are stipulated for doing a particular act in a
specific manner then it would mean that any deviation
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therefrom is not permitted at all and it should be performed
in the manner itself as per Rules. The present case is
squarely covered by the above case laws/judgements.
I find that the show cause notice also alleges that in their
half yearly return in the form ST-3 for the period October-
2014 to March-2015, the noticee has not shown value of
output services exported during the quarter October-2014 to
December-2014, and in such a scenario, it cannot be
ascertained as to whether output services were actually
exported or not as claimed by the party and whether
payment for the said services was received by the exporter.
The above facts indicate that the party could not give
plausible explanation or supporting evidence with regard to
why their said refund claim of Rs.9,07,640/- should not be
rejected on the aforesaid grounds. In view of the foregoing,
the judgments/ case laws as relied on by the party in their
defence reply & additional written submissions are of no help
to them. Taking note of the above facts, statutory provisions
and the Govt. of India's Order, I am inclined to hold that the
instant refund claim of Rs.9.07,640- is not admissible to the
party."
2.4 Aggrieved appellant has filed the appeal before the first
Appellate Authority which has been rejected by the impugned
order. Hence the present appeal.
3.1 I have heard Shri Rakshit Verma, Advocate for the
appellant and Shri Santosh Kumar Departmental Representative
for the Revenue.
3.2 Arguing for the appellant, learned counsel submits that
➢ the fact of export of service is not in dispute and the same
has been accepted by the Lower Authorities.
➢ The Commissioner (Appeals) in the impugned order has
travelled beyond the show cause notice itself stating that
the export of service has not been established.
➢ a Chartered Accountant Certificate dated 31.12.2014 to
justify that the turnover of export of service is inclusive of
export of service during the relevant period i.e. October
2014 to December 2014 has been correctly furnished by
the appellant in the refund application. The Chartered
Accountant Certificate has been furnished in the prescribed
form. The veracity of the certificate has not been disputed.
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Service Tax Appeal No.70169 of 2021
➢ The definition of export turnover of service makes it crystal
clear that the details of export turnover service declared
by the appellant in Form-A is correct since the export
turnover of service also included those services whose
provision has been completed for the relevant period but
payment of such services was received in advance. This
fact is well established by the Chartered Accountant
Certificate. That the copies of FIRCs pertaining to the year
2011 was in respect of export invoices issued on
17.10.2014.
➢ As regards mentioning of wrong address on the FIRCs it is
to be taken on record that appellant had taken over a firm
namely M/s Uttam Sucrotech International, KD-53A, Kavi
Nagar, Ghaziabad vide agreement dated 01.09.2006. Due
to this reason the FIRCs submitted by the appellant
contain the address of taken over firm i.e. Uttam
Sucrotech International. The address of the address of the
taken over firm was updated with the registered address of
the appellant company and to substantiate the same they
have enclosed the copy of the Bank statement for the
month of September 2011.
➢ The appellant has produced copies of 04 FIRCs pertaining
to refund claims of the disputed period. From these FIRCs
it is evident that 02 FIRCs have been issued on 26.09.2011
and 02 FIRCs on 22.01.2015.
➢ Non furnishing of export turnover in ST3 Return does not
dis-entitle appellant's claim to refund of accumulated
Cenvat Credit against export service especially when
export of service is not in dispute and has been certified by
the Chartered Accountant who is a statutory auditor of the
company. Reliance is placed in the case of M/s
Mccormick Support Services Pvt. Ltd. v.
Commissioner of Service Tax, Gurgaon {2018 (364)
ELT 985 (Tri.-Chandigarh).
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3.3 Arguing for the Revenue learned Departmental
Representative reiterates the findings of the impugned order.
4.1 I have considered the impugned order along with the
submissions made in the appeal and during the course of
arguments.
4.2 The refund claim filed by the appellant have been rejected
by both the Lower Authority after recording the finding of fact to
the effect that the export turnover of the appellant for the
quarter October 2014 to December 2014 is neither indicated in
the ST3 Return nor could have been established in a cogent and
convincing manner.
4.2 The entire case of the appellant is on the basis of
certificate of Chartered Accountant which is reproduced below:-
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Service Tax Appeal No.70169 of 2021
6.3 It is a settled principle in law when a finding of fact has
been arrived at by two independent authorities sitting separately
in any proceeding the said finding of fact should not be disturbed
by the Appellant Authority till the time it is shown that the
finding of the fact is perverse. I do not find any perversity in the
finding of fact recorded.
4.4 The contention of the appellant that the FIRCs of 2011 are
in respect of the services exported for which export has been
completed during this quarter cannot be established. They have
not indicated anything as export turnover in the ST-3 return
filed. Further how FIRCs of 2011 issued in the name/address of
another person can be accounted towards the service exported
by the appellant is not coming forth. It is settled principal in law
that the Chartered Accountant has got no role to determine the
correspondence/admissibility of the refund field by the appellant.
It is the jurisdictional officers who would on the basis of the
information available including the certificate produced
determine the correspondence of claim and decide the dis-
admissibility.
4.5 Export turnover of service has been defined by Rule 5 of
the Cenvat Credit Rules, 2004. Export turnover of services =
payments received during the relevant period for export services
+ export services whose provision has been completed for which
payment had been received in advance in any period prior to the
relevant period - advances received for export services for which
the provision of service has not been completed during the
relevant period. The said rule clearly provides that he export
turnover of services would include only those services which
were exported during the relevant quarter. The proof of export
of services is receipt of the FIRC's. The receipt of FIRC is proof of
export and not the export of service itself. In the present case
from the ST-3 return of the appellant it is evident that appellant
has not indicated anything as "export of services". However
subsequently by way of the Refund application filed under Rule
5, they have claimed that services have been exported for which
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they had received FIRC's in 2011 and 2015. I do not find any
corroboration between the two. Even the address indicated in
the FIRC's do not tally with the address of the appellant.
4.6 Notification No.27/2012 provided as follows:-
"2.0 Safeguards, conditions and limitations.- Refund of
CENVAT Credit under rule 5 of the said rules, shall be
subjected to the following safeguards, conditions and
limitations, namely:-
(a) the manufacturer or provider of output service shall
submit not more than one claim of refund under this rule for
every quarter: provided that a person exporting goods and
service simultaneously, may submit two refund claims one in
respect of goods exported and other in respect of the export
of services every quarter.
(b) in this notification quarter means a period of three
consecutive months with the first quarter beginning from 1st
April of every year, second quarter from 1st July, third
quarter from 1st October and fourth quarter from 1st
January of every year.
(c) the value of goods cleared for export during the quarter
shall be the sum total of all the goods cleared by the
exporter for exports during the quarter as per the monthly
or quarterly return filed by the claimant.
(d) the total value of goods cleared during the quarter shall
be the sum total of value of all goods cleared by the
claimant during the quarter as per the monthly or quarterly
return filed by the claimant.
(e) in respect of the services, for the purpose of computation
of total turnover, the value of export services shall be
determined in accordance with clause (D) of sub-rule (1) of
rule 5 of the said rules.
(f) for the value of all services other than export during the
quarter, the time of provision of services shall be determined
as per the provisions of the Point of Taxation Rules, 2011.
(g) the amount of refund claimed shall not be more than the
amount lying in balance at the end of quarter for which
refund claim is being made or at the time of filing of the
refund claim, whichever is less.
(h) the amount that is claimed as refund under rule 5 of the
said rules shall be debited by the claimant from his CENVAT
credit account at the time of making the claim.
(i) In case the amount of refund sanctioned is less than the
amount of refund claimed, then the claimant may take back
the credit of the difference between the amount claimed and
amount sanctioned.
3.0 Procedure for filing the refund claim. - (a) The
manufacturer or provider of output service, as the case may
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be, shall submit an application in Form A annexed to the
notification, to the Assistant Commissioner of Central Excise
or Deputy Commissioner of Central Excise, as the case may
be, in whose jurisdiction,- (i) the factory from which the final
products are exported is situated. (ii) the registered
premises of the provider of service from which output
services are exported is situated.
(b) The application in the Form A along with the documents
specified therein and enclosures relating to the quarter for
which refund is being claimed shall be filed by the claimant,
before the expiry of the period specified in section 11B of the
Central Excise Act, 1944 (1 of 1944). (c) The application for
the refund should be signed by-
(i) the individual or the proprietor in the case of proprietary
firm or karta in case of Hindu Undivided Family as the case
may be;
(ii) any partner in case of a partnership firm;
(iii) a person authorized by the Board of Directors in case of
a limited company;
(iv) in other cases, a person authorized to sign the refund
application by the entity.
(d) The applicant shall file the refund claim along with the
copies of bank realization certificate in respect of the
services exported.
(e) The refund claim shall be accompanied by a certificate in
Annexure A-I, duly signed by the auditor (statutory or any
other) certifying the correctness of refund claimed in respect
of export of services.
(f) The Assistant Commissioner or Deputy Commissioner to
whom the application for refund is made may call for any
document in case he has reason to believe that information
provided in the refund claim is incorrect or insufficient and
further enquiry needs to be caused before the sanction of
refund claim.
(g) At the time of sanctioning the refund claim the Assistant
Commissioner or Deputy Commissioner shall satisfy himself
or herself in respect of the correctness of the claim and the
fact that goods cleared for export or services provided have
actually been exported and allow the claim of exporter of
goods or services in full or part as the case may be."
FORM A
Application for refund of CENVAT Credit under rule 5 of the CENVAT
Credit Rules, 2004 for the Quarter ending
d d m m y y y y
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To,
The Assistant Commissioner or Deputy Commissioner of Central Excise,
..................................................................................................
Sir, I/We have exported, the final products or output services during the Quarter and am/are claiming the refund of CENVAT Credit in terms of Rule 5 of the CENVAT Credit Rules, 2004 as per the details below :
S. No. Description Amount in Rs.
1. Total value of the goods cleared for export and exported during the quarter.
2. Export turnover of the services determined in terms of Clause D of sub-rule (1) of rule 5.
3. Total CENVAT Credit taken on inputs and input services during the quarter.
4. Amount reversed in terms of sub-rule (5C) of rule 3
5. Net CENVAT Credit = (3) - (4)
6. Total value of all goods cleared during the quarter including exempted goods, dutiable goods and goods for export.
7. Export turnover of services and value of all other services, provided during the said quarter.
8. All inputs removed as such under sub-rule (5) of rule 3, against an invoice during the quarter.
9. Total Turnover = (6) + (7) + (8)
10. Refund amount as per the formula = (1) * (5)/(9), in respect of goods exported.
11. Refund amount as per the formula = (2) * (5)/(9), in respect of services exported.
12. Balance of CENVAT Credit available on the last day of quarter.
13. Balance of CENVAT Credit available on the day of filing the refund claim.
14. Amount claimed as refund, [Amount shall be less than the minimum of (10), (12) and (13) in case of goods or the minimum of (11), (12) and (13) in case of services]
15. Amount debited from the CENVAT account [shall be equal to the Amount claimed as refund (14)] 2.0 Details of the Bank Account to which the refund amount to be credited :
Refund sanctioned in my favour should be credited in my/ our bank account.
Details furnished below;
(i) Account Number :
(ii) Name of the Bank :
(iii) Branch (with address) :
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3.0 Declaration
(i) I/We certify that the aforesaid particulars are correct.
(ii) I/We certify that we satisfy all the conditions that are contained in rule 5
of the CENVAT Credit Rules, 2004 and in Notification No. ......./2012-C.E. (N.T.), dated ___ June, 2012.
(iii) I/We am/are the rightful claimant(s) of the refund of CENVAT Credit in terms of rule 5, the same may be allowed in our favour.
(iv) I/We declare that no separate claim for drawback or refund has been or will be made under the Customs and Central Excise Duties Service Tax Drawback Rules, 1995 or for claim of rebate under Central Excise Rules, 2002 or the Export of Services Rules, 2005 or under Section 93 or 93A of Finance Act, 1994( 32 of 1994).
(v) I/We declare that we have not filed or will not file any other claim for refund under rule 5 of CENVAT Credit Rules, 2004, for the same quarter to which this claim relates.
Date d d m m y y y y Signature of the Claimant ...........................
Name of the
Claimant ..........................
Registration Number ..........................
Address of the
Claimant ..........................
4.0 Enclosures :
(i) Copies of Customs Certified ARE-1 form along with the copies of
shipping bill and bill of lading in case of the export of goods.
(ii) Copies of the Bank Realization Certificates for the export of services. [refer 3(d)]
(iii) Certificate in Annexure A-I from the Auditor (statutory or any other) certifying the correctness of refund claimed in respect of export of services. [refer 3(e)] 5.0 Refund Order No. Dat d d m m y y y y e The refund claim filed by Shri/Messrs _______________________has been scrutinized with the relevant Central Excise/ Service Tax records. The said refund claim has been examined with respect to relevant enclosures and has/has not been found in order. A refund of Rs. ____________________________ (Rupees ____________________) is sanctioned/The refund claim filed is rejected.
14Service Tax Appeal No.70169 of 2021 Assistant Commissioner or Deputy Commissioner of Central Excise Forwarded to-
(i) The Chief Accounts officer, Central Excise, for information and necessary action.
(ii) The Commissioner of Central Excise.
Assistant Commissioner or Deputy Commissioner of Central Excise __________________________________________________________________ ______
(i) Passed for payment of Rs. ______________ (Rupees ____________) The amount is adjustable under head "0038 - Union Excise Duties - Deduct Refunds/0044 - Service tax - Deduct Refunds".
(ii) Amount credited to the account of the claimant as per the details below :
Amount refunded Account Number Reference No. of transfer Name of the Bank Address of the Branch Date d d m m y y y y Chief Accounts officer 4.7 From the perusal of the said notification alongwith Form A it is evident that all the documents in respect of the said refund claim including Bank realization certificate/FIRCs needs to be filed by the appellant at the time of filing the refund claim.
Counsel for the appellant sought time for filing certain documents which have not been filed up till now. Impugned order clearly considers the said fact that no case has been made out for the claiming any "export turnover" by the appellant on the basis of the cogent evidence and records. The relevant findings are recorded in 7 to 10 of the impugned order. 4.8 I further observe that the failure to provide the relevant details of services exported during the relevant period in the ST- 3 return is not merely a procedural violation but a deliberate act to claim undue benefit. It is a settled position in law that such failures which would cause administrative inconvenience or perpetuate fraud cannot be held to be mere procedural 15 Service Tax Appeal No.70169 of 2021 infractions. These conditions which are prescribed by the said notification are mandatory and contravention of the same is a legally tenable for rejection of the claim made by the appellant for refund. In case of Salora International Ltd [2017 (47) STR 177 (T)] following was observed:
"7. The Tribunal in the case of Golden Dew Tea Factory v. CCE, Coimbatore - 2007 (219) E.L.T. 362 (Tri.-Chennai) = 2009 (15) S.T.R. 358 (Tribunal) has observed, while interpreting a Notification Number 41/99-C.E. that conditions of the notification are mandatory and not mere procedural and hence non-fulfillment of the same is not condonable. There is no rule for any intendment while interpreting the notification and regard must be had to the clear meaning of the words used therein. The said decision of the Tribunal was upheld by the Hon'ble Supreme Court and the appeal filed by the assessee was rejected reported as Golden Dew Tea Factory v. Commissioner - 2008 (221) E.L.T. A28 (S.C.). Further, the Hon'ble Supreme Court in the case of CCE v. Mewar Bartan Nirman Udyog Jaipur - 2008 (231) E.L.T. 27 (S.C.) has observed that rules of interpretation are applicable only to cases of classification under the tariff and are not applicable to interpretation of Customs notification which have to be read strictly. When language is clear and proper effect must be given to it.
8. When I apply the ratio of the above decisions to the facts of the present case, I find that appellant have not admittedly fulfilled the Condition 3(j) of the notification which is unambiguous and clear in language. Further, the appellant have not adhered to the time factor which is a part of notification itself and cannot be given a go by."
4.9 Relying on the said decision in case of Salora, Delhi Bench in case of Louis Dreyfus Commodities India Pvt. Ltd. [2019 (29) G.S.T.L. 472 (Tri. - Del.)] observed as follows:
8. The contention of Learned Counsel for the appellant is that the delay in filing the refund claim is a procedural lapse and can be condoned and in this connection, Learned Counsel placed reliance upon the decision of the Mumbai Tribunal in Chandrashekhar Exports. The contention of Learned Authorised Representative of the Department is that the delay in filing the refund claims cannot be condoned as the notification itself provides that the claim for refund has to be filed within one year 16 Service Tax Appeal No.70169 of 2021 from the date of export of the said goods. In this connection, has placed reliance upon a decision of the Madras High Court and the two decisions of the Tribunal, to which we shall refer to.
9. It is not possible to accept the contention of Learned Counsel for the appellant that the delay in filing of the refund claim is merely a procedural lapse and can be condoned. There is nothing in the notification which may lead to such an inference.
In fact, the notification categorically states that the claim for refund "shall" be filed within one year from the date of export of the said goods. The notification does not contain any provision for condoning the delay in filing the claim for refund. This issue was examined by the Gujarat High Court in Patel Construction Company, though in connection with the provisions of Section 11B of the Central Excise Act, 1944. The Court observed that no relief can be granted contrary to the statute and, therefore, no direction can be issued to an Authority to condone the delay in filing the refund application. In K.S Oils Limited, the application was filed claiming refund in terms of Notification No. 41/2007, dated 6 October, 2007, which notification, as noticed above, had been superseded by the subsequent notification bearing No. 17/2009, dated 7 July, 2009. The provisions relating to claim of refund are identical in both the notifications as the claim for refund has to be filed within one year from the date of export of the said goods. The Tribunal, after considering various decisions of the High Court and the Tribunal, observed that the time limit specified in the notification to file a claim for refund has to be adhered to, since there is no provision to extend the said time limit. The observations are as follows :
"6. We have heard both the sides and perused the appeal records. The only dispute in the present appeal is the applicability of time limit for filing claim under Notification No. 41/2007-S.T. The said notification is an exemption notification issued in terms of Section 93(1) of Finance Act, 1994. It exempts taxable services listed therein, received by an exporter 17 Service Tax Appeal No.70169 of 2021 and used for export of goods, from the whole of service tax leviable thereon subject to certain conditions. The exemption is to be claimed by the exporter, by way of refund claim. The time limit for filing such claim has been mentioned in para 2(e) for the said notification. The notification does not refer to any other supporting provision, like Section 11B of the Central Excise Act, 1944 with reference to time limit. As already noted, Notification No. 41/2007 is dealing with exemption and Section 11B of Central Excise Act deals with refund of excess/erroneously paid duty. Notification No. 41/2007 is a self-contained exemption procedure which also stipulates certain time limits for claiming the said exemption by way of refund. Such time limit cannot be brushed aside as simple technical procedural requirement.
7. We have referred to various decided cases relied upon by both the sides. The respondent relied on various cases in support of the impugned order. In CCE, Pune v. Chandrashekhar Exports reported in 2015-TIOL-2448-CESTAT-MUMBAI, Sandoz Polymers Pvt. Ltd. v. CST, Ahmedabad reported in 2013 (301) S.T.R. 527 (Tri. - Ahmd.) and Raymond Ltd. v. CCE, Mumbai-III reported in 2015 (381) S.T.R. 441 (Tri. - Mumbai), the discussion and reference was to provision of Notification No. 17/2009-S.T. also. Admitted, the said notification which succeeded Notification No. 41/2007-S.T. provided for time limit of one year for filing refund claim. We note that in the present case the claim was filed in February, 2009 much before the issue of Notification No. 17/2009-S.T., dated 7-7-2009. Similarly, in Gran Overseas Ltd. v. CCE, Delhi-I reported in 2016-TIOL-3373 (CESTAT-Del.), the Tribunal relied on earlier decision in Chandrashekhar Exports (supra) which relied on Raymond Ltd. (supra). The reference is to applicability of Notification No. 17/2009. In Bandedkar Brothers Pvt. Ltd. v. CCE, Goa reported in 2015-TIOL-2485-
CESTAT-MUMBAI, the Tribunal examined the scope of amending Notification No. 32/2008-S.T. which substituted "six months" in place of "60 days" for filing claim under Notification No. 41/2007. Further, we note that reference was made regarding 18 Service Tax Appeal No.70169 of 2021 applicability of provisions of Section 11B being a substantive provision of Act which will prevail on notification which is only supplementary. We find the notification has no reference to Section 11B. This is an exemption notification issued under Section 93(1). The procedure to claim exemption is post facto, by way of a refund with binding conditions. Non-fulfilment of any one of the conditions will put the claim for notification in jeopardy.
8. We have also referred to the cases relied upon by the Revenue to state that the time limit mentioned in the notification cannot be ignored by the sanctioning authority. In Principal Commissioner of S.T. v. R.R. Global Enterprises Pvt. Ltd. reported in 2016 (451) S.T.R. 5 (A.P.), the Hon'ble High Court at Hyderabad held that :-
"45. Once a full-fledged system is put in place, for the exercise of discretion, the compliance with the requirements of such a system alone will remove any kind of arbitrary exercise of power. The Courts are obliged to interpret notifications of this nature, in such a manner that the power of discretion is reduced to the minimum."
9. The Hon'ble High Court was examining the question whether the conditions stipulated in an exemption notification can be said to be a mere matter of procedure, on which some amount of laxity can be given. It was held that the conditions mentioned in the notification cannot be considered as mere procedural requirements which can be relaxed. Further, in Midex Global Pvt. Ltd. v. CCE, Indore reported in 2016 (41) S.T.R. 125 (Tri. - Del.), it was held that the exemption available will be only on fulfilment of conditions prescribed therein. The Tribunal held that Notification No. 41/2007 is available only on fulfilment of condition including filing of claim within time limit prescribed therein. The Tribunal noted that this is an exemption notification and not a refund within the scope of Section 11B. Similar ratio was adopted in Spark Engineering P. Ltd. v. CCE, Ghaziabad 19 Service Tax Appeal No.70169 of 2021 reported in 2013 (31) S.T.R. 71 (Tri. - Del.), in Calcutta Export Company v. CCE, Kolkata-II reported in 2016 (44) S.T.R. 672 (Tri. - Kolkata), Sakay Overseas v. CCE, Ludhiana reported in 2014 (33) S.T.R. 456 (Tri. - Del.) and H.R. International (Unit- II) v. CCE, Ludhiana reported in 2015 (37) S.T.R. 649 (Tri. - Del.).
10. Considering the above discussion and decided cases and on careful examination of the provisions of Notification 41/2007, we find that the condition of time limit specified in the said notification to claim the exemption by way of filing a claim has to be adhered to by the respondent. There is no provision to extend the said time limit. There is no reason to bring in the provisions of Section 11B in the absence of any such link or reference in the said notification. Accordingly, we find the impugned order is not legally sustainable. The same is set aside. The original order is restored. The appeal by Revenue allowed. The cross-objection is also disposed of."
10. The same view was expressed by the Tribunal in Salora International Limited and K.S. Oils. The Mumbai Bench of the Tribunal in Chandrashekhar Exports, on which reliance was placed by the Learned Counsel for the appellant referred to the decision of the Tribunal in Raymond Limited v. Commissioner of Central Excise, Mumbai-III - 2015 (38) S.T.R. 441 (Tri. - Mumbai). In the said decision itself, the Bench observed that the refund claims had been filed within a period of one year from the date of the export of the goods. The issue was whether the time period would be covered by the Notification No. 41/2007 or the amended Notification No. 17/2009. It is not the case of the appellant that by any subsequent notification a different time period was prescribed. The aforesaid decision, therefore, does not come to the aid of the appellant."
4.10 In case of Dilip Kumar & Co [2018 (361) ELT 577 (SC)], relying upon the earlier decisions, following ahs been observed:
20Service Tax Appeal No.70169 of 2021
38. We will now consider another Constitution Bench decision in Commissioner of Central Excise, New Delhi v. Hari Chand Shri Gopal, (2011) 1 SCC 236 = 2010 (260) E.L.T. 3 (S.C.) [hereinafter referred as 'Hari Chand case' for brevity]. We need not refer to the facts of the case which gave rise to the questions for consideration before the Constitutional Bench. K.S. Radhakrishnan, J., who wrote the unanimous opinion for the Constitution Bench, framed the question, viz., whether manufacturer of a specified final product falling under Schedule to the Central Excise Tariff Act, 1985 is eligible to get the benefit of exemption of remission of Excise duty on specified intermediate goods as per the Central Government Notification dated 11-8-1994, if captively consumed for the manufacture of final product on the ground that the records kept by it at the recipient end would indicate its "intended use" and "substantial compliance" with procedure set out in Chapter 10 of the Central Excise Rules, 1944, for consideration? The Constitution Bench answering the said question concluded that a manufacturer qualified to seek exemption was required to comply with the preconditions for claiming exemption and therefore is not exempt or absolved from following the statutory requirements as contained in the Rules. The Constitution Bench then considered and reiterated the settled principles qua the test of construction of exemption clause, the mandatory requirements to be complied with and the distinction between the eligibility criteria with reference to the conditions which need to be strictly complied with and the conditions which need to be substantially complied with. The Constitution Bench followed the ratio in Hansraj Gordhandas case (supra), to reiterate the law on the aspect of interpretation of exemption clause in para 29 as follows
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"The law is well-settled that a person who claims exemption or concession has to establish that he is entitled to that exemption or concession. A provision providing for an exemption, concession or exception, as the case may be, has to be 21 Service Tax Appeal No.70169 of 2021 construed strictly with certain exceptions depending upon the settings on which the provision has been placed in the statute and the object and purpose to be achieved. If exemption is available on complying with certain conditions, the conditions have to be complied with. The mandatory requirements of those conditions must be obeyed or fulfilled exactly, thought at times, some latitude can be shown, if there is failure to comply with some requirements which are directory in nature, the non- compliance of which would not affect the essence or substance of the notification granting exemption."
39. The Constitution Bench then considered the doctrine of substantial compliance and "intended use". The relevant portions of the observations in paras 31 to 34 are in the following terms -
"31. Of course, some of the provisions of an exemption notification may be directory in nature and some are mandatory in nature. A distinction between the provisions of a statute which are of substantive character and were built in with certain specific objectives of policy, on the one hand, and those which are merely procedural and technical in there nature, on the other, must be kept clearly distinguished...
Doctrine of substantial compliance and "intended use"
32. The doctrine of substantial compliance is a judicial invention, equitable in nature, designed to avoid hardship in cases where a party does all that can reasonably be expected of it, but failed or faulted in some minor or inconsequent aspects which cannot be described as the "essence" or the "substance" of the requirements. Like the concept of "reasonableness", the acceptance or otherwise of a plea of "substantial compliance"
depends upon the facts and circumstances of each case and the purpose and object to be achieved and the context of the pre- requisites which are essential to achieve the object and purpose of the rule or the regulation. Such a defence cannot be pleased if a clear statutory pre-requisite which effectuates the object and 22 Service Tax Appeal No.70169 of 2021 the purpose of the statute has not been met. Certainly, it means that the Court should determine whether the statute has been followed sufficiently so as to carry out the intent for which the statute was enacted and not a mirror image type of strict compliance. Substantial compliance means "actual compliance in respect to the substance essential to every reasonable objective of the statute" and the Court should determine whether the statute has been followed sufficiently so as to carry out the intent of the statute and accomplish the reasonable objectives for which it was passed.
33. A fiscal statute generally seeks to preserve the need to comply strictly with regulatory requirements that are important, especially when a party seeks the benefits of an exemption clause that are important. Substantial compliance with an enactment is insisted, where mandatory and directory requirements are lumped together, for in such a case, if mandatory requirements are complied with, it will be proper to say that the enactment has been substantially complied with notwithstanding the non-compliance of directory requirements. In cases where substantial compliance has been found, there has been actual compliance with the statute, albeit procedurally faulty. The doctrine of substantial compliance seeks to preserve the need to comply strictly with the conditions or requirements that are important to invoke a tax or duty exemption and to forgive non-compliance for either unimportant and tangential requirements or requirements that are so confusingly or incorrectly written that an earnest effort at compliance should be accepted.
34. The test for determining the applicability of the substantial compliance doctrine has been the subject of a myriad of cases and quite often, the critical question to be examined is whether the requirements relate to the "substance" or "essence" of the statute, if so, strict adherence to those requirements is a precondition to give effect to that doctrine. On the other hand, if 23 Service Tax Appeal No.70169 of 2021 the requirements are procedural or directory in that they are not of the "essence" of the thing to be done but are given with a view to the orderly conduct of business, they may be fulfilled by substantial, if not strict compliance. In other words, a mere attempted compliance may not be sufficient, but actual compliance with those factors which are considered as essential."
51. In Hari Chand case (supra), as already discussed, the question was whether a person claiming exemption is required to comply with the procedure strictly to avail the benefit. The question posed and decided was indeed different. The said decision, which we have already discussed supra, however, indicates that while construing an exemption notification, the Court has to distinguish the conditions which require strict compliance, the non-compliance of which would render the assessee ineligible to claim exemption and those which require substantial compliance to be entitled for exemption. We are pointing out this aspect to dispel any doubt about the legal position as explored in this decision. ...."
4.11 As the appellant has not been able to show any perversity in the finding recorded by the lower authority and also not has not been able to establish the factum of export of services during the period for which this refund claim has been filed, I do not find any merits in the appeal filed.
5.1 Appeal is dismissed.
(Dictated and pronounced in open court) (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) Nihal