Refund of Service Tax under Notification No. 41/2007-ST, 17/2009-ST

PJ/Case Laws/2010-11/1007

Case: CCE, Ahmedabad-II Vs M/s Dishman Pharmaceuticals & Chemicals Ltd, Ahmedabad

Citation: 2010-TIOL-1639-CESTAT-AHM

Issue:- How will the time limit be considered for a refund claim when the services availed does no pertain to the period for which the refund claim is filed?

Brief Facts:- Respondents is engaged in the manufacture of Bulk drugs and Fine Chemicals. They filed refund claim of service tax paid during the 3^rd quarter of Calendar Year under Notification No. 41/2007-ST dated 06.10.2007, Notification No. 03/2008-ST dated 19.02.2008 and Notification No. 17/2008-ST dated 01.04.2008 on 10.11.2008. The refund claim was filed for availing the services of Goods Transport Agency, Port Service and Custom House Agent services classified under Section 65 (105) (zzp), (zn) and (h) respectively of the Finance Act, 1994.

Department issued show cause notice proposing to reject the refund for non-compliance of the provisions of aforesaid Notifications and under the provisions of Section 11B of the Central Excise Act, 1944. By impugned order the refund claim was rejected.

In appeal, the Commissioner (Appeal) rejected part of the refund claim. Claim pertaining to Port services was rejected on the ground that service providers were not authorised by the Port to carry the said services and the services provided like THC, Documentation, Repo charges were not covered under Port Services but were covered under Custom House Agent (CHA) services. It was held that since the CHA services was specified under Notification No. 17/2008-ST w.e.f. 01.04.2008 the appellant were eligible for refund of service tax paid on the said services. It was held that as long as the payment of service tax made towards shipping bill charges, loading and unloading charges, forklift/crane charges, sealing and strapping charges, DDC, haulage, THC, Documentation, Repo charges etc and their utilisation is not disputed in the show cause notice, the same cannot be denied to the appellant as long as the conditions of the said notification are not violated. Thus, the refund of CHA was held admissible to the appellant.

Regarding the rejection of refund claim pertaining to the invoices issued by the CHA of the appellant by the Adjudicating Authority on the ground that the service provider had not followed the conditions specified in column 4 of the Notification No. 17/2008-ST, dated 01.04.2008, the Commissioner (Appeal) held that it was not specified the condition which was violated. The said refund claim was held admissible on the ground that the invoices of CHA mentioned the basic details like name of the appellant, service tax registration no. of CHA, gross amount charges, applicable service tax & education cess etc and the payment for all the invoices covered under the refund claim has been borne and the services are used in respect of export of goods.

Further, the Commissioner (Appeal) rejected the refund claim pertaining to GTA, on the ground that the respondent had failed to produce the invoices issued by the transport agencies giving details of the exporter invoice relating to the exported goods.

The Commissioner (Appeal) further observed that part of the refund was filed for period from 01.07.2008 to 30.09.2008, whereas the services availed do not belonged to the said period. It was observed that if service tax paid is not related to the said quarter, the refund of service cannot be granted for which no claim stands filed.

Against this Revenue is in appeal before the Tribunal.

Appellant’s Contentions:- Revenue contended that the service providers were registered under the category of Business Auxiliary Services and not under the Port services/ CHA services.

Respondent’s Contention:- With regard to refund claim relating to GTA service, respondent submitted that the transporters never raise the invoice and give lorry receipts only, which reflects upon the entire particulars. Such lorry receipts mention the exporter’s invoice and the corresponding shipping bills so as to co-relate their claim.

Respondent further contended that the time limit for claiming refund stands extended from 60 days to six months from the end of the quarter. It was submitted that the Board in his Circular No. 112/06/2009-ST dated 12.3.2009 has clarified that the refund of service tax in respect of goods exported during the quarter March to June 2008 could be filed till 31 December 2008, if the refund is otherwise admissible.

Reasoning of Judgment:- With regard to the issue that the service provider was registered under different category, the Tribunal held that the said issue stands clarified by the Board vide its Circular No. 112/06/2009 dated 12/3/2009 that procedural lapses are to be dealt with separately, independent of the process of refund. Thus, Revenue’s contention that service provider was registered under different category cannot be made a basis for denial of refund to the appellant. In any case, the Tribunal noted that the amount of refund sanctioned by Commissioner (Appeals) is also less than Rs. 50,000/-, therefore, the Tribunal found no reason to interfere in the impugned order of Commissioner (Appeals).

With regard to refund claim of service tax not pertaining to allowed period of filing refund, relying upon the clarification given by Circular No. 112/06/2009-ST dated 12.3.2009, the Tribunal held that reasoning adopted by the Commissioner (Appeal) in this regard cannot be upheld.

With regard to refund claim relating to GTA service, the Tribunal held that there is no rebuttal to the appellant’s contention that the lorry receipts and the corresponding shipping bills specify the relevant details relating to export goods. The rejection of the claim on the technical ground that there was no invoice but instead there were lorry receipts is not justified. Part of impugned order in this regard set aside.

Accordingly, Tribunal set aside the part of the impugned order of Commissioner (Appeals) and remanded the matter adjudging the admissibility of the refund claim on merits.

Judgment:- Appeal partly allowed and partly remanded.

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