Custom, Excise & Service Tax Tribunal
Sanchita Frozen Foods Pvt Ltd vs Commissioner Of Service Tax, Division ... on 27 November, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NOs. ST/89764, 89765/13, ST/85834 to 85838/14 (Arising out of Order-in- Appeal No. 350 to 352 dated 26/8/2013 passed by the Commissioner of Central Excise & Service Tax,(Appeals-IV), Mumbai -I ) For approval and signature: Honble Mr Ramesh Nair, Member(Judicial) =======================================================
1. Whether Press Reporters may be allowed to see : No
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 Lordships wish to see the fair copy : seen
of the Order?
4. Whether Order is to be circulated to the Departmental: Yes
authorities?
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Sanchita Frozen Foods Pvt Ltd
:
Appellants
VS
Commissioner of Service Tax, Division V, Mumbai
:
Respondent
Appearance
Shri. V.V. Deo, C.A. for the Appellants
Shri. B. Kumar Iyer, Superintend (A.R.) for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 27/11/2015
Date of decision: /2016
ORDER NO.
Per : Ramesh Nair
The fact of the case is that the appellant filed refund claim in terms of Notification No. 41/2007-ST dated 6/10/2007 on services used for export of goods. The Lower authority sanctioned refund claim partly and rejected part of the refund claim filed by the appellant on one or more of the following grounds.
(a) The refund is not admissible if drawback is claimed.
(b) Refund in respect of Terminal Handling Charges is not admissible in view that the appellant have not submitted the invoices of input services and corresponding export invoices.
(c) Claim of refund on CHA services not admissible as the services are related to out of pocket expenses such as conveyance, fax, telecom Agency etc. which do not fall under the head of CHA Service.
(d) Refund in respect of Terminal Handling Charges was denied on the ground that the service is not covered by the port services, it is not specified services in the notification, the provider of this service deposited the service tax under the head of Business Auxiliary Service or Business Support Service. The Terminal Handling charges specifically eligible w.e.f. 2/7/2009.
(e) Refund in respect of Technical testing & Analysis/Testing inspection and Certification services was denied on the ground that there is no co-relation between the invoices of service provider and goods exported, hence the appellant could not establish the nexus between service with the goods exported.
(f) Refund regarding the Courier services was rejected on the ground that input service invoices are not getting co-related with the export invoices.
(g) Refund regarding the CHA Service was rejected on the ground that goods cleared for export were brought back to the town therefore CHA services in respect of such goods shown is not in respect of export of goods. It was also contended that BRCs not submitted, bill was not submitted, services notified vide Notification No. 17/2008 dated 1/4/2008.
(h) Refund regarding Banking and Financial Services was rejected on the ground that service tax amount is not specified in bank advise and there is no co-relation of service invoices with the export invoices.
Aggrieved by the rejection of refund claims on the above ground appellants are in appeal before this Tribunal.
2. Shri. V.V. Deo, Ld. C.A. appearing on behalf of the appellant made following submissions:
(a) Regarding the drawback claim, it is his submission that the condition of drawback claim in the notification has been deleted vide Clause (e) of para 1 of notification No. 33/2008 dated 7/12/2008. The appellant have not claimed any duty drawback in respect of export taken place prior 7/12/2008. He submits that till 30/9/2011 exporter had option to claim either duty drawback or DEPB and appellant had opted for DEPB for all the period upto 30/9/2011. W.e.f. 1/10/2011 the appellant started claiming duty drawback under Customs, Central Excise Duties and Service Tax Drawback Rules, 1995. as DEPB was abolished with effect from that date therefore appellant cannot be denied the refund on this count as drawback was claimed only w.e.f. 1/10/2011 whereas the condition of non availment of drawback was deleted w.e.f. 7/12/2008.
(b) Regarding the Terminal Handling Charges, it is not correct that invoices were not submitted. The input service invoices and corresponding export invoices were submitted at both stages and it is also enclosed to the appeal paper book.
(c) Regarding the CHA Services, even though individual service may be Misc. Services such as conveyance, fax and telecom Agency etc but these bunch of services were provided by CHA and bill was raised by CHA therefore this will be considered as CHA Service. In support of his submission, he placed reliance on the judgment of M/s. Suncity Art Exporters Vs. CCE, JaipurII[2014 (11) TMI 251 Cestat Delhi] vide final Order No. 54083-54068/14 dated 16/10/2014 wherein it was held that the refund cannot be denied on the ground that service provider are not registered for any particular service.
(d) Regarding the objection on Terminal Handling Charges, he submits that the Terminal handling charges is part of port service therefore on terminal handling charges refund cannot be denied. This has been held by the Honble Gujarat High Court in case of CCE Vs. AIA Engineering Pvt Ltd[2014(36) STR 1236(Guj)]. He submits that definition of port service covered the Terminal Handling Charges also therefore refund cannot be denied. This has been held in following judgments:
(a) Sesa Goa Ltd Vs. CCE, Goa[2014(35) STR 558(Tri. Mumbai)]
(b) CCE, Ahmedabad Vs. Ramdev Food Products Pvt Ltd [2010(19) STR 833(Tri. Ahmd.)]
(c) Western Agency (Tri. LB, Chennai)
(d) ADF Foods Ltd Vs. CCE, Ahmedabad[2013(30)STR 423 (Tri. Ahmd)] As regard the Terminal Handling service, the provider has deposited the service tax under Business Auxiliary service or Business Support Service, for this reason refund cannot be denied for the reason that it is not significant that under which head service tax was paid but if the services infact are eligible for refund, it cannot be denied as has been held in CCE, Belapur Vs. Pratap Re-Rolling Pvt Ltd. [2014(34) STR 868(Tri. Mumbai)] and CEBAY Systems (India) Pvt Ltd Vs. CCE, Mumbai[2011(21) STR 668(Tri. Mumbai)]. He further submits that for all the export invoices as specified in OIO, Terminal handling charges and other port service plus service tax have been charged in section of bill of lading itself. Copies of such bills of lading have been submitted with refund application.
(e) Regarding Technical Testing and analysis and testing inspection certification service, he submits that their export is of perishable food product, buying countries have their own food safety and standard in our country, two sets of law are existing (1) Approval of plants as set up as per those (MPEDA Act, 1072) and (2) Quality control through testing, analysis and certification, prior to shipment (The Export(Quality control & Inspection) Act, 1963 and as per Section 3 of the said Act prior inspection is mandatory. He submits that documents such as LCs /Export Orders, stipulated prior testing, analysis, inspection & health/sanitary certificate. The relevant LCs are enclosed with the appeal wherein stipulations for TTA+ TIC were made. He further submits that there is co-relation between four export invoices in respect of technical testing analysis and technical inspection and certification service, therefore on this service refund is admissible.
(f) As regard the co-relation of courier service with export invoices, he submits that appellant before both the lower authority have produced the co-relation between input service invoice and export invoice. In case of some CHA service refund was denied, when the goods cleared for export was brought back to the town therefore CHA service was not used for export. In this regard, he submits that the said consignment was received back in the factory for packing deficiency which was rectified and same consignment was exported vide three invoices. The appellant submitted BRC, copy of bill before both the lower stages. Regarding the notification of service w.e.f. 1/4/2008, it is his submission that all the service are pertaining to the period after 1/4/2008 therefore there cannot be any question about notification of service w.e.f. 1/4/2008.
(g) Regarding the banking and financial service, the appellant had submitted the input service invoice and co-relation is established for the reason that banking services availed relates to inward remittance of export proceeds.
In view of above submission, it can be seen that the most of the query are unnecessary by the lower authority as on the face of the record, despite having all the documents on record they have contended contrary that documents are not available therefore lower authority has rejected the claim just for sake of rejection therefore the order of rejection cannot be sustained.
4. Shri. B. Kumar Iyer, Ld. Superintendent (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that appellant has availed drawback therefore they are not eligible for the refund under notification No. 41/2007 in light of the judgment in case of Rajasthan Textile Mills Vs. Commissioner of Central Excise, Jaipur[2015(37) S.T.R. 410(Tri. Del.)] wherein it was held that on availing drawback in respect of export goods benefit of notification No. 41/2007-ST is not available. Regarding the Terminal Handling services, the appellant have not brought anything on record to show that it was on account of port service. The service tax has been paid on Business Auxiliary Service/Business Support Service availed from shipping agent which is not one of the specified service mentioned in Notification No. 41/2007-ST.
4. I have carefully considered the submissions made by both sides and perused the record.
5. I find that as regard the rejection of claim on the ground that the appellant have availed drawback, the lower authority have not considered the amendment vide Notification No. 33/2008 dated 7/12/2008 wherby condition as specified under clause (e) of para 1 has been deleted w.e.f. 7/12/2008 therefore even though the appellant have availed the drawback refund cannot be rejected on this ground.
5.1 As regard the Terminal Handling charges, as per the judgment relied upon by the appellant, it is clear that terminal handling charges being part of the port service and since the port service is specified service, refund is admissible.
5.2 As regard the co-relation, Ld. Counsel has clearly submitted and shown the evidences that relevant documents showing co-relation were submitted before both the lower authorities, if it is so, refund cannot be rejected for want of co-relation between input service and output export service.
5.3 As regard the Technical testing and Analysis/Technical inspection certification services, I agree with the submission of the Ld. Counsel that their export goods is perishable food products for which the quality control is one of the prime requirement for production and export of goods therefore input service related to technical testing and analysis/testing inspection certification service are eligible for the refund. In respect of export goods, the appellant have shown from the records that LCs and export orders containing the mention of prior testing analysis inspection and health/sanitary certificate therefore there is no doubt that this technical analysis and Technical inspection certification services are in respect of export of goods and co-relation is also established.
5.4 Regarding the courier service as per the documents submitted before the lower authority co-relation is clearly established. Co-relation between input service and export invoices are clearly established.
5.5. Refund on CHA services denied on the ground that it is in respect of goods which was brought back to the town, the appellant have shown co-relation with the goods so brought back to town were exported, therefore the goods in respect of which the CHA services were availed have ultimately been exported therefore refund is admissible on CHA services.
5.6 Regarding the banking and financial services, services are related to inward remittance of export proceeds which is exclusively related to export goods only. As regard the banking and financial service, banks are not required to issue the tax invoices, however from any documents of the bank if is established the payment of service tax, refund should be granted.
5.7 In one of the appeal refund of CHA service was disallowed on the ground that CHA has collected amount towards labour, cartridge, conveyance, fax, telecom expenses etc. In this regard the judgment M/s. Suncity Art Exporters (supra) support the claim of the appellant that irrespective of any category of services, it is provided by the CHA refund is admissible therefore ground taken by the lower authority for rejection of refund of CHA service is not correct.
6. In view of the above facts and discussions, I am of prima facia view that appellant is entitle for the refund and same should not have been rejected. However in most of the cases despite availability of the relevant documents, lower authority have rejected their claim with contention that co-relation was not established and documents were not submitted, I therefore allow the appeal by way of remand to the original adjudicating authority to pass a fresh order in respect of claim which was rejected, taking into consideration of my above observations on the facts and merits of the case. Appeals are allowed by way of remand.
(Order pronounced in court on_________________) Ramesh Nair Member (Judicial) sk 11 ST/89764, 89765/13, ST/85834 to 85838/14