Refund of tax paid on taxable services used for export of goods

PJ/Case Law /2016-17/3420

Case:-JAIN GRANI MARMO (P) LTD.VERSUSCOMMISSIONER OF CENTRAL EXCISE, JAIPUR

Citation:- 2016 (45) S.T.R. 430 (Tri. - Del.)

Brief Facts:-The brief facts of the case are that the appellant is a 100% E.O.U. engaged in the manufacture and export of marble and granite slabs. The appellant had filed the refund application under Notification No. 41/2007-S.T., dated 6-10-2007 in respect of the goods exported during the period from April to June, 2008. The refund application with regard to the taxable service, namely, port service, CHA service and GTA service were sought to be denied on the ground that the condition of the Notification read with Circular issued by the C.B.E. & C. have not been complied with by the appellant. The Adjudication order passed in this regard culminated in the impugned order, upholding rejection of refund application. Hence, the present appeal before this Tribunal.

Appellant’s Contention:-The ld. Advocate appearing for the appellant submits that in the Annexure attached to the refund application, the appellant had clearly mentioned the particulars namely, shipping bill, bill of lading, name of service provider, etc., to demonstrate that the goods manufactured in the factory were duly exported. With regard to port service, the submission of the appellant is that even if the services provided by the service provider are falling under the category of Business Auxiliary Service, but since the said service has been provided within the port area, should confirm to the port service for the purpose of availment of benefit contained in the Notification dated 6-10-2007. To support his stand that credit on the port service is available to the appellant, the ld. Advocate has referred to the circular dated 26-2-2010 issued by the C.B.E. & C., clarifying that all services provided within the port should fall under the port service for the purpose of refund of service tax paid on the taxable services. With regard to CHA service, the ld. Advocate submits that the service providers are registered with the Customs House for providing the Customs House Agent Service. Thus, the service tax paid by the service providers should be available as refund to the appellant. As regards to the GTA service, the submission of the appellant are that the goods have been directly removed from the factory to the port of export. Thus, the condition enumerated in the Notification read with the circular has been duly complied with for the purpose of refund of service tax paid thereon. To support his stand that the benefit of refund in terms of Notification No. 41/2007, dated 6-10-2007 is available to the appellant, the ld. Advocate has relied on the judgment of Hon’ble Gujarat High Court in the case of Commissioner v. Adani Enterprises reported in 2014 (35) S.T.R. 741 (Guj.) and also the decision of this Tribunal in the case of SRF Ltd. v. CCE, Jaipur-I reported in 2015 (40) S.T.R. 980 (Tri.-Del.).

Respondent’s Contention-Mrs. Suchitra Sharma, the ld. Commissioner, A.R. appearing for the respondent reiterates the findings recorded in the impugned order and further submits that since conditions enumerated in the notification dated 6-10-2007 have not been complied with in entirety the benefit contained therein shall not be available to the appellant.

Reasoning Of Judgement:-The Central Government in exercise of the powers conferred under sub-section (1) of Section 93 of the Finance Act, 1994 have issued the Notification No. 41/2007-S.T., dated 6-10-2007, providing for refund of service tax paid on the taxable services used for exportation of the goods. With regard to the port service, the C.B.E. & C. vide Circular dated 26-2-2010 has inter alia clarified that irrespective of the clarification of service provided by the service provider, if the same relates to the services provided in the port, the same shall be considered for benefit of refund in terms of the Notification dated 6-10-2007. Tribunal find from the available records that the services received by the appellant have in fact been provided within the port, and thus, in trbunal’s view, such services shall qualify for the benefit of refund contained in the Notification dated 6-10-2007. In this context, tribunal find support from the judgment cited by the ld. Advocate that different services provided within the port shall merit consideration for refund in terms of the notification referred supra. With regard to the CHA service, tribunal find that the service providers are duly recognized by the Customs authorities for providing such service which is evident from certificates issued in favour of the service provider by the Customs Department. Hence, the services provided by the CHA should also merit consideration for refund in terms of the Notification dated 6-10-2007. However, tribunal find that with regard to the GTA service, the appellant has not complied with the requirement of the notification read with the circular in its entirety. However, on perusal of the documents available in file, tribunal find that there is co-relation between the goods removed from the factory to the port of export. Thus, even if, some of the condition of the notification have not been complied with, in tribunal’s opinion, such condition should be considered as procedural, for which the substantive right of the appellant to claim the benefit of refund as an exporter should not be disallowed. In view of the above analysis and discussions, tribunal is of the opinion that the appellant shall be eligible for refund of service tax paid on the taxable services. Therefore, the impugned order is set aside and the appeal is allowed in favour of the appellant.

Decision:- Appeal allowed.

Comment:- The analogy of the case is that refund application cannot be denied on the ground that the condition of the Notification read with Circular issued by the C.B.E. & C. have not been complied with because the conditions of the refund notification were procedural for which the substantive right of the appellant to claim the benefit of refund should not be disallowed. Furthermore, it was concluded that in case of services provided in the port area and classified under business auxiliary services, the refund cannot be denied merely on the grounds that business auxiliary services are not eligible for refund. This is for the reason that as far as the services are used in port area, refund should be granted to the exporter. Therefore the order was set aside and the appeal was allowed

Prepared By:- Arundhati Bajpai

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PJ/Case Law /2016-17/3420

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