Whether refund claim admissible on service tax paid on empty containers transported from export terminal to the factory?

PJ/Case Law/2013-14/2048

Case:-VIPPY INDUSTRIES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE & S.T., INDORE

Citation:-2013(32) S.T.R. 213(Tri.-Del.)

Brief Facts:-This appeal is preferred against a common Order-in-Appeal, dated 8-8-2012, confirming several Orders-in-Original, dated 2-4-2012 whereby the adjudicating authority disallowed refund claims asserted by the appellant/assessees, in terms of Central Government Notification No. 17/2009-S.T., dated 7-7-2009 as amended by the Notification No. 40/2009-S.T., dated 30-9-2009. By the Notifications referred to, the Central Government in exercise of powers conferred under sub-section (1) of Section 93 of the Finance Act, 1994 exempted the specified taxable services from whole of the service tax leviable under Section 66 and Section 66A of the Act, subject to the conditions specified. The condition in issue is that the exemption claimed by the exporter must be in relation to the specified service received and used by him for export of the specified goods.

Appellant Contentions:- Appellant submitted that containers employed by him for transportation of specified goods from the place of manufacture to the export terminal were paid by series of single invoices, which included freight charges for onward transportation for export as well as return of the empty containers to the factory premises. There is no reason to deny refund on service tax paid on specified service received and used by him for export of the said specified goods. Hence, appellant prays to grant refund under the notification no. 17/2009-S.T.

Respondent Contentions:-The respondent reiterates the findings of the adjudicating authority denying the refund claim filed by the assessee under notification no. 17/2009-S.T.

Reasoning of Judgment:-We have considered the submission from both sides and perused the record, we find that the adjudicating authority rejected the refund claim to the extent of 50% on the ground that containers employed by the assessee for transportation of specified goods from the place of manufacture to the export terminal were paid by series of single invoices, which included freight charges for onward transportation for export as well as return of the empty containers to the factory premises. The adjudicating authority found and recorded that appellate authority confirmed the primary authority's conclusion, that the component of the consolidated freight charges and the service tax paid thereon, to the extent attributable to return of empty containers to the factory premises was disenlitled to the benefit of refund. The decisions of this Tribunal in C.C.E., Madurai v. Tata Coffee Ltd. - 2011 (21) S.T.R. 546 (Tri.-Chennai); Balkrishna Industries Ltd. v. C.C.E., Aurangabad - 2011 (24) S.T.R. 433 (Tri.-Mum.); Garware Polyester Ltd. v. C.C.E., Aurangabad - 2011-IST - 400 - (CESTAT – Mum.) = 2012 (27) S.T.R. 288 (Tri.-Mumbai) and Vippy Industries Ltd. v. C.C.E., Indore (Final Order No. ST/A/730-731/12- Cus., dated 29-11-2012) [2013 (30) S.T.R. 238 (Tribunal)] have consistently taken the view that inasmuch as the entirety of the said activity is in relation to the transportation of export of the specified goods, refunds claimed in entirety are liable to be paid, in terms of the Notifications referred to. We see no reason to conclude otherwise, as the reasons recorded in the decisions referred are consistent with a true and fair interpretation of the Notification No. 17/2009-S.T., dated 7-7-2009 and Notification No. 40/2009, dated 30-9-2009, respectively. On the aforesaid analysis, the appeals are allowed. The order of the Appellate Commissioner (Appeals) confirming respective orders of the adjudicating authority are quashed and appellant assessee is declared entitled to refunds as claimed. There shall however be no order as to costs.

Decision:-Appeal allowed.

Comment:- The substance of this case is that refund claims are allowed in terms of notification no. 17/2009-S.T. on the condition that it is in relation to service received or used for export of goods. Therefore, if an assessee received service in relation to the transportation of export of the specified goods and paid service tax on freight charges for the export of said goods including freight with respect to return of empty containers in factory, entire refund of service tax would be admissible to assessee. This is also supported by decision of this Tribunal in C.C.E., Madurai v. Tata Coffee Ltd. - 2011 (21) S.T.R. 546 (Tri.-Chennai).

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PJ/Case Law/2013-14/2048

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