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PJ/Case Law/2013-14/1989

Whether appellant can avail service tax refund on Technical Testing & Analysis & CHA services under notification no. 41/2007-ST?
Case:-GREENSPAN AGRITECH PVT. LTD. VERSUS COMMISSIONER OF C.EX., PUNE-I

Citation:-2013(31) S.T.R. 229 (Tri.-Mumbai)

Brief Facts:-The appellant filed this appeal against the order-in-appeal No. PI/VSK/185/2009, dated 29-7-2009 whereby the Commissioner (Appeals) upheld the order of original adjudicating authority with certain modifications.
Briefly stated facts of the case are that the appellant, a 100% EOU, is engaged in manufacture of Green House in ready to assemble and export the same. The appellant availed the benefit of Notification No. 41/2007-S.T., dated 6-10-2007. In accordance with the provision of the above Notification they filed a refund claim for Rs. 2,99,875/- on 18-11-2008. The original adjudicating authority sanctioned refund of Rs. 82,870/- and had rejected the refund claim amounting to Rs. 2,17,005/- on two grounds firstly an amount of Rs. 76,701/-, as time-barred and secondly an amount of Rs. 1,40,304/- as not admissible under Notification No. 41/2007-S.T., dated 6-10-2007. The appellant challenged the above order. The Commissioner (Appeals) upheld the order of original adjudicating authority ex­cept for the refund related to for the month of March, 2008 for which he has re­manded the case to the lower adjudicating authority. Aggrieved by the same the appellant filed the present appeal.
 
Appellant Contention:-The contention of the appellant is that the power of remand by Com­missioner (Appeals) has been taken away by amending Section 35A with effect from 11-5-2001 which applies to refund of service tax also. He further contends that they have been denied refund of Rs. 76,701/- as time-barred. The contention is that the Notification has been amended from time to time. The "two month” period provided by the Notification No. 41/2007-S.T., dated 6th October, 2007 was amended to six months vide Notification No. 32/2008-5.T., dated 18th No­vember, 2008 and further amended for "one year" by Notification No. 17/2009- S.T., dated 7th July, 2009 and they have filed the refund claim within the period of one year from the quarter ending covering the period from October, 2007. In support of their contention they have relied on the decision of the Hon’ble Su­preme Court in the case of ITW Signode India Ltd. v. Collector of Central Excise - 2003 (158) E.L.T. 403 (S.C.). The contention is that the CHA service is covered under Sl. No. 13 of Notification No. 41/2007 which allows all the charges, whether or not reimbursable, collected by the custom house agent from the ex­porter in relation to export goods. Other taxable services provided by the said custom house agent and received by the exporter, whether or not relatable to export goods. The contention of the appellant is that the services have been pro­vided by CHA in relation to export of goods of the appellant since the export is to Kenya and the refund of such services provided by a technical testing and analysis agency is allowed as per Sl. No. 3 of Notification No. 41/2007. The learned Consultant also submitted that the lower adjudicating authority has not so far decided the case which has been remanded by the Commissioner (Ap­peal).
 
Respondent Contention:-The contention of the department is that the period involved in this case is from October, 2007 to March, 2008. The appellant has filed the refund claim on 18th November, 2008. Notification No. 41/2007 dated 6-10-2007 amended by Notification No. 32/2008 would apply in this case vide which six months has been substituted in place of sixty days. Therefore, the period from October, 2007 to February, 2008 is time-barred. As regards the refund of service tax paid on technical service the appellant not provided any evidence that it is also a part of agreement between the appellant and the customers. As re­gards the service tax paid for the CHA service the contention is that as per Sl. No. 6 of the Notification No. 41/2007-S.T. services provided for transport of said goods from the inland container depot to the port of export only are allowed. Therefore, the refund on service tax paid on element of transportation of goods from the place of export to destination is not allowed.
 
Reasoning of Judgment:-We have carefully gone through the case records and submissions made by both the sides. First Tribunal took the issue whether the Commissioner (Appeals) can remand the case to the lower adjudicating authority. Provisions of law clearly disclose that pursuant to that amendment brought out in the year 2001, the power of remand which was earlier available to the Commissioner (Appeals) has been specifically deleted from the statute book. The Hon'ble Supreme Court in the case of MIL India Ltd. v. CCE, Noida - 2007 (210) E.L.T. 188 (S.C.) held that "the power of remand by Commissioner (Appeals) has been taken away by amending Section 35A with effect from 11-5-2001 under the Finance Bill, 2001." Undisput­edly the refund is covered under the Notification No. 41/2007 amended vide No­tification No. 32/2008-S.T. which were provided for filing of refund within six months from the date of last quarter. Undisputedly the refund claim has been for the period from October, 2007 to February 2008 on 18-11-2008 which is beyond six months. Therefore, the same is time-barred. Even amending Notification No. 17/2009 provides for time limit of filing of refund claim within one year from the date of export. Firstly the amending Notification was issued after the event of the case and there is no retrospective effect was given to the amending Notification and, therefore, the same is not applicable. As far as the case law cited by the ap­pellant the Hon'ble Apex Court's decision relates to Section 11A and Rule 173 demand under Section 11A and declaration for classification under Rule 173 of erstwhile Rules, 1944. The issue involved in this case is the claim of benefit of Notification and the notification granting benefit is 'required to be strictly con­strued, therefore the case law cited by the appellant is not relevant to the case. So far as the merit of the case is concerned, relevant portion of the Notification No. 41/2007-S.T., dated 6-10-2007 is reproduced below for betterment :-
Sr.
No.
Taxable Services Conditions
3 Section 65(105)(zzh) Services provided by a technical testing and analysis agency in relation to technical testing and analysis of said goods    where such technical testing and analysis is required to be undertaken as per the written agreement between the exporter and the buyer of the said goods (i) the exporter furnishes a copy of the written agreement entered into with the buyer of the said goods requiring testing and analysis of the said goods; and
(ia) where the buyer of the said goods does not require testing and analysis of the said goods, but testing is statutorily stipulated by domestic rules and regulations, the exporter shall furnish copy of such rules or regulations stipulating testing and analysis of the said goods; and
[Above (ia) has been inserted vide NM. No. 32/2008 dated 18-11-2008]
(ii) the invoice issued by the service pro­vider shall be specific to export goods and shall be in the name of the exporter.
6. Section 65(105)(zzp) Services provided          for transport of said goods from the inland container depot to the port of export -
13. Section 65(105)(h) Service provided by a custom house agent in relation to export goods exported by the exporter. Exporter shall produce,-
(i)            Invoice issued by custom house agent for providing services specified in column (3) specifying:
(a)   Number and date of shipping bill,
(b)  Description of export goods,
(c)   Number and date of the invoice issued by the exporter relating to export goods,
(d)  Details of all the charges, whether or not reimbursable, collected by the custom house agent from the exporter in relation to export goods,
(ii)           Details of other taxable services provided by the said custom house agent and received by the exporter, whether or not relatable to export goods.
 
So far as the service tax paid on technical testing service is con­cerned, the appellant has produced the copy of Notice of Kenya Bureau of Stan­dards which provides for requirement of Test Report or certificate for goods to be exported to Kenya. Therefore, it is incumbent upon the appellant to adhere to the specifications otherwise there is likelihood that they would not be accepted by the Customers, thus, the appellant is well within their claim for the service tax paid on technical testing and analysis agency service and are eligible for benefit provided under the Notification. So far as CHA service is concerned Sl. No. 1(d) and II of Sr. No. 13 of Notification No. 41/2007-S.T. which covers the charges which not reimbursed by the exporters. Other technical services provided by CHA and received by the exporter, whether or not relatable to export goods.
Moreover there cannot be two different yardsticks for charging the service tax and allowing the benefits. Hence, refund of technical services and CHA services is accordingly allowed. The appeal is disposed of in the above manner.
In view of the above the refund for the period from October, 2007 to February 2008 is rejected as time barred and refund on service tax paid on Technical Testing and Analysis and CHA service is allowed. Appeal disposed of in above terms.
 
Decision:-Appeal allowed on terms.

Comment:-The essence of this case is that refund of service tax paid on Technical Testing & Analysis service when it is proved by the assessee that such services are necessary and with respect to service tax paid on CHA services is admissible under notification no. 41/2007.
 
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