Custom, Excise & Service Tax Tribunal
M/S K. Prashant Enterprises vs Commissioner Of Service Tax, Mumbai on 22 September, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. IV Appeal No. ST/35 to 38/11 (Arising out of Order-in-Appeal No. RBT/29 to 32/2010 dated 30.9.2010 passed by the Commissioner of Central Excise (Appeals), Mumbai-I). For approval and signature: Honble Shri Anil Choudhary, 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 : Yes 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? ====================================================== M/s K. Prashant Enterprises Appellant Vs. Commissioner of Service Tax, Mumbai Respondent Appearance: Shri Anil Balani, Advocate for Appellant Shri N.N. Prabhudesai, Supdt. (AR) for Respondent CORAM: SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL) Date of Hearing: 22.09.2014 Date of Decision: .2015 ORDER NO. Per: Shri Anil Choudhary
The appellant, M/s K. Prashant Enterprises, manufacturer and exporter of readymade garments, is in appeal against a common Order-in-Appeal No. RBT/29 to 32/2010 dated 30.9.2010 passed by the Commissioner of Central Excise (Appeals), Mumbai-I.
2. The brief facts are that the appellant being an exporter is entitled to exemption of Service Tax paid on the specified input services utilized by it in the course of its export business as provided under Notification No. 41/2007-ST dated 6.10.2007. Accordingly for the year 2008, the appellant filed 4 quarterly claims for refund of Service Tax paid by them on taxable services utilized in the business of export. The details of which are as follows: -
Sr. No. Order-in-Original & date Period Date of receipt Refund amount
1.
Refund/GS/19/10 dt. 15.01.2010 Jan, 08 to Mar, 08 30.5.2008 Rs.41,729/-
2. Refund/GS/20/10 dt. 15.01.2010 Apr, 08 to June, 08 Not mentioned Rs.42,394/-
3. Refund/GS/21/10 dt. 15.01.2010 July, 08 to Sept, 08 Not mentioned Rs.43,794/-
4. Refund/GS/22/10 dt. 15.01.2010 Oct, 08 to Dec, 08 19.03.2009 Rs.40,798/-
2.1 The Assistant Commissioner found certain discrepancies and accordingly issued show-cause notices and thereafter adjudicated the claims rejecting the same. In the case for claim of Courier Service, it was found that the invoice for the services does not mention the IEC Code/Export Invoice No. etc and as such, the claim was found not admissible. As regards Storage and Warehousing services, the Assistant Commissioner observed that the same should have been used exclusively for storage of export goods and the storage or warehouse should be approved by the competent authority. It was found that the warehouse was not exclusively used for storage of export goods neither the appellant provided documentary evidence to prove that the warehouse is approved by the competent authority. Accordingly, the claim was rejected. As regards the CHA services, it was found that the invoices did not fulfill all the conditions of the said notification and accordingly, the claim was found not tenable.
2.2 Being aggrieved, the appellant preferred appeal against rejection of refund for all the four quarters before the Commissioner (Appeals), who was pleased to reject the appeals upholding the Order-in-Original.
3. The learned Counsel for the appellant, Mr. Anil Balani, first of all draws my attention that after issue of the exemption Notification No. 41/07-ST dated 6.10.2007, in view of the difficulty faced by the assessees, in availing the exemption by way of refund, amendment and substitution were made time to time as well as the supersession of the notification was also done. The departmental clarification was issued on 17.4.2008, 12.5.2008, 11.12.2008 and 12.3.2008, Notification No. 41/07 was in operation till 6.7.2009 and was superseded by Notification No. 17/09-ST dated 7.7.2009. The said notification is claimed by the department, in its Clarificatory Circular dated 6.7.2009 as revamp of the entire scheme with the object of achieving speedy refunds to exporters. The major departure from the original scheme was that the refund was now to be granted on self certification/certification by Chartered Accountant. Accordingly, the departmental clarifications issued earlier to Notification No. 17/2009 are also applicable to refund. W.e.f. 3.1.2012, Notification No. 17/09 has been superseded by Notification No. 52/2011 dated 30.12.2011. Thus, the basic criteria for exemption of Service Tax for exporters are : -
(i) Services to be specified under the Notification,
(ii) Exporter of goods should be registered with Export Promotion Council and Exporters having Import Export Code,
(iii) Exporter of the goods have paid the Service Tax thereon to the provider of taxable service.
(iv) Such exporter have not claimed CENVAT Credit on such Service Tax paid, and
(v) Claim of refund is more than Rs.500/- or more.
3.1 It is further urged that it is not in dispute that the service in respect of which refund was claimed are specified service and the assessee possesses Import Export Code. There is no dispute as to the appellant having availed the services and paid Service Tax thereon to the provider of taxable service. There is no dispute to the fact that the appellant have not claimed CENVAT Credit on such service tax paid and admittedly the amount of refund claim is more than Rs.500/- in all cases. The refunds, that have been rejected only for minor or venial breach, most of which have been liquidated, simplified/modified in subsequent circular/ clarifications.
3.2 As regards the storage and warehousing service, the condition of approval and/or the warehouse has been used exclusively in export of goods have been removed by the Notification No. 52/2011 (para 41, sub para 12) which also stood clarified by Circular No. 112/06/09 dated 12.3.2009.
3.3 As regards CHA service, the same was collected under Port Service by the service provider, vide clarificatory Circular No. 112/06/2009-ST dated 12.3.2009, the CBE&C on the issue raised the service provider providing services to the exporter provides various service. But he has registration of only one service. The refund is being denied on the grounds that the taxable services that are not covered under the registration are not eligible for such refunds, had clarified that 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. 3.4 The learned Counsel further points out that both the authorities below have failed to take into notice the various clarifications, which resulted into miscarriage of justice.
3.5 As regards the CHA service, the learned Commissioner (Appeals) observed in respect of the CHA service that the period Jan, 08 to March, 08, the same is not allowable as the CHA service was inserted/modified by Notification No. 17/2008 dated 1.4.2008. It was further observed that on scrutiny of the plea for remaining three quarters, the description of goods exported by the appellant does not appear on the CHA invoice/bill as required in the conditions laid down for exemption. Accordingly, it was held that the appellant is not entitled for refund of Service Tax in respect of CHA service.
3.6 As regards the Storage and Warehouse service, the disallowance was confirmed as the learned Commissioner (Appeals) failed to take into notice the subsequent clarifications and dilution of conditions vide clarification dated 12.3.2009 and Notification No. 52/2011.
3.7 In respect of Courier Service, it has been held that the appellant have failed to establish the relationship of service with the goods exported and also in the absence of IEC Code not mentioned in the invoice. Accordingly, the finding of the Assistant Commissioner was upheld. Being aggrieved, the appellant have preferred this appeal before this Tribunal.
3.8 The appellant vehemently argued that in view of the law, time to time clarification issued and clarified by subsequent notifications superseding the original notification No. 41/2007, if the same are read together, it will be found that the appellant is entitled to refund. The appellant have filed copies of some of the invoices to demonstrate and establish the eligibility.
3.9 As regards the invoice for CHA service is concerned, issued by Kanayasingh & Sons, the CHA is having the registration no. 11/0037. As per bill no. 105 dated 1.11.2008, it is seen that name of the appellant is mentioned therein, number of packages, mode of transport, Port of discharge, shipping bill no., export invoice no. are given as well as Service Tax have been fully charged and the bill have been paid. From perusal of another bill no. 099 dated 12.10.2008, all the aforementioned details are also present. Similarly, in other bills dated 6.5.2008, 20.6.2008, 29.9.2008, 6.9.2008 and 28.8.2008, all the relevant details are mentioned save and except IEC code no.
3.10 The learned Counsel also took me through the sample bill of the courier services, wherein the name and address of the appellant is mentioned, the consignment no. of courier as well as destination is mentioned, Service Tax duly charged and has been paid, is mentioned in the invoice. Invoice further bears the PAN no. of the service provider - skypack, the IEC code was mentioned by hand at the top left hand of invoice.
3.11 As regards the invoice for Warehouse service issued by Professional Caretaker/HUF, their invoice bear the address of the appellant, bill no. and date of the bill, number of cartons stored, from which date to which date, the PAN no. and Service Tax registration no. of the service provider and further a certificate has been issued by the service provider to the effect that they are engaged in the business of storage for last 12 years and stored the export consignment of M/s K Prashant Enterprises, the appellant herein from time to time.
3.12 The appellant further vehemently argued that in view of the subsequent clarifications, amendments and superseded from time to time, the court below have erred in denying the exemption and accordingly appeal should be allowed.
3.13 The appellant further relied on the SMC ruling of this Tribunal in the case of Alpine Apparels Vs. Commissioner of Central Excise, Delhi 2013 (30) STR 687 (Tri-Del), wherein this Tribunal has held that where the invoice of courier agency gives all the details save and except the IEC Code no. of exporter and there is no dispute with regard to the holding of IEC code with importer, the refund cannot be denied. The appellant also relies on the ruling in the case of Parameswari Textiles Vs. Commissioner of Central Excise, Tiruchirapalli 2011 (22) STR 625 (Tri-Chennai), wherein refund of service tax being technical testing and analysis was in question under Notification No. 41/07, this Tribunal observed that the export goods have been got tested, as to the specification which was requirement for acceptance of goods by the buyer in Sweden and accordingly, it was held that relation is established between the services availed and export of goods and in view of the policy of the government, not to burden exports with domestic taxes, refund was held to be allowable.
4. The learned AR relies on the impugned order. The learned AR further relies on the Division Bench ruling of this Tribunal in the case of Magsons Exports Vs. Commissioner of Service Tax, Delhi 2013 (32) STR 22 (Tri-Del), wherein in the case of manufacturer exporter of readymade garments, who claimed benefit under Notification No. 17/2009 and applied for refund, the same was rejected, in respect of courier services for want of IEC code in the invoice, it was held by this Tribunal that provisions of Notification No. 17/2009 in respect of courier agency service, it is available subject to condition that receipt issued by the courier agency specified the IEC Code No. of exporter and in absence of the same, it was held that condition was not fulfilled and accordingly, rejection of refund was upheld.
5. Having considered the rival contentions, I hold that the appellant is entitled to refunds of Service Tax as claimed by them in all the four appeals save and except in respect of CHA service for the period Jan, 08 to March, 08 as the said service was notified from 1.4.2008. As regards the ruling of the Division Bench of this Tribunal in the case of Magsons Exports (supra), I find that the same is without taking into notice the various subsequent clarifications and superseding notifications wherein the condition has been simplified and or clarified. Further, in view of the fact that there is no dispute that the appellant is registered with the DGFT and having IEC Code no. and the same is mentioned on various other export documents, I hold that the ruling of the Division Bench is distinguishable as the same have not taken into notice the subsequent development of law. Further, in course of export, the documents are generated as the transaction progresses and all the documents are not generated at one point of time. The whole refund claim cannot be rejected only on the ground of non-finding of all the particulars or an instrument or documents, if it is available in other accompanying documents which are annexed together, supporting the transaction of export. The intention of the legislature is not to export the domestic taxes and to encourage export. In this view of the matter, I hold that the services have been utilized in the course of export business of the appellant and accordingly, the appellant is entitled for refund as indicated above.
6. Thus, the appeal is allowed. The adjudicating authority is further directed to grant refund within a period of eight weeks from production of a copy of this order or on receipt of this order, with interest as per Rules.
(Pronounced in Court on ..) (Anil Choudhary) Member (Judicial) Sinha 9