Refund of Education Cess paid on services used in export of goods.

PJ/CASE LAW/2016-17/3189

Case:-TUMKAR MINERALS PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, GOA

Citation:- 2016 (41) S.T.R. 434 (Tri. - Mumbai)

Brief Facts:-All these appeals are filed against Order-in-Appeal Nos. 21 to 46/2011, dated 31-1-2011. As all these appeals raise same question of law they are being disposed by a common order. Heard both sides and perused the records. The issue involved in all these appeals is whether the appellants herein are eligible for the refund of Education Cess paid on the service tax in respect of port related services - technical testing and analyzing services. First appellate authority has held that appellants are eligible for refund of service tax paid by the service providers but are not eligible for the Education Cess paid on the service tax by the service providers and relied upon the conditions of Notification No. 41/2007-S.T. to hold that the said notification contemplates for the refund of service tax paid and not Education Cess. The first appellate authority has relied upon the decision of the Tribunal in the case of Balasore Alloys Ltd. - 2010 (20) S.T.R. 506 (Tri.-Kolkata).

Appellant’s Contention:-Learned counsel appearing on behalf of appellants would submit that the Central Board of Excise and Customs (C.B.E. & C.) after noting the decision of the Tribunal in the case of Balasore Alloys Ltd. (supra) has, vide Circular No. 134/3/2011-S.T., dated 8-4-2011, clearly clarified wherever Education Cess has been refunded to the exporters along with service tax by virtue of exemption from whole of service tax, the same need not be recovered. It is the submission of the learned counsel that this Circular’s ratio has to be applied in the cases in hand and refund should be allowed. Learned counsel would also submit that the Tribunal in the case of Cauvery Coffee Traders- 2012 (7) LCX 265 = 2013 (31) S.T.R. 126 (Tribunal) considered the Circular and granted relief to the assessee therein and the said judgment was followed by the Tribunal in the case of CCE, Mangalore v. Kudremukh Iron Ore Co. Ltd. - 2011 (12) LCX 9 = 2013 (31) S.T.R. 633 (Tribunal).

Respondent’s Contention:-Learned D.R. reiterated the findings of the first appellate authority.

Reasoning Of Judgement:-On perusal of the impugned order tribunal find that the first appellate authority set aside the order-in-original which granted refund to the appellant by relying on the judgment of the Tribunal in the case of Balasore Alloys Ltd. (supra) which is in favour of the Revenue. Tribunal find that the first appellate authority has not considered the subsequent judgments passed by the Tribunal in the case of Cauvery Coffee Traders and Kudremukh Iron Ore Co. Ltd.(supra). It is also to be noted that the C.B.E. & C. Circular No. 134/3/2011, dated 8-4-2011 was issued specifically noting the judgment of the Tribunal in the case of Balasore Alloys Ltd. (supra) and the Board’s view is ‘if that Education Cess paid on the service tax by the service providers is also to be refunded to appellants. They find that the ratio of the judgment of the Tribunal in the case of Cauvery Coffee Traders and Kudremukh Iron Ore Co. Ltd.(supra) is the correct view as if the service tax liability is discharged on which Education Cess is paid on the goods exported, the benefit of refund of such Education Cess paid should not be denied when the export of goods is not in dispute. In view of the foregoing, tribunal find that all appellants are eligible for refund of Education Cess paid on the service tax by the service providers. All the appeals are allowed with consequential relief.

Decision:-Appeals allowed.

Comment:- The crux of the case is that if the service tax liability is discharged on which Education Cess is paid on the goods exported, the benefit of refund of such Education Cess paid should not be denied when the export of goods is not in dispute. And, therefore all the exporter assessees are eligible for refund of Education Cess paid on the service tax. This was based on the landmark decision in the case of Cauvery Coffee Traders and Kudremukh Iron Ore Co. Ltd.

Prepared By-Neelam Jain

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PJ/CASE LAW/2016-17/3189

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