Whether the refund rejection on the ground that refund filed after stipulated period, service tax registration number not mentioned on invoice, assesses name not mentioned on invoice, services used does not correlate with export of goods? Is sustainable?

PJ/Case Law/2019-2020/3603

Adani Enterprises Limited vs. Commissioner of Central Excise & ST, Ahmedabad
Brief Facts: - The Assesses is a merchant exporter inter-alia engaged in the business of export of goods. The assessee filed refund claim on account of services received for export of goods. The Assistant Commissioner of Service Tax partially sanctioned refund claim and rejected the balance amount. The assessee filed appeal before the Commissioner (Appeals). The case was remanded back to the adjudicating authority & appeal rejected on the grounds that Service Tax registration number of service provider was not mentioned on invoice, refund claim filed after stipulated period, assesses name not mentioned on invoice & refund claim on services has no co-relation with export etc.

Issue: - Whether the refund rejection on the ground that refund filed after stipulated period, service tax registration number not mentioned on invoice, assesses name not mentioned on invoice, services used does not correlate with export of goods? Is sustainable?
Appellant’s Contention:- The department contented that the registration number of the service provider was not mentioned in the invoice, in view of Board Circular No. 106/9/2008-ST dated 11.12.2008, the said invoice is not proper documents as per rule 4A of Service Tax Rules, 1994 therefore, refund claim was not permissible.
But assessee contended that the government had amended above circular vide circular no. 112/6/2009-ST dated 12.03.2009 wherein the issue related to mention of registration number was clarified and stated that refund cannot be denied due to this discrepancy.
He further submits that GTA service used for transportation of goods from ICD to Port under Serial No. 6 of Notification No. 41/2007 does not stipulate any condition. The notification has specifically provided conditions of claiming refund of GTA services for transportation of goods from place of removal to ICD or Port at Serial No. 12 of the table appended in the notification. No such condition has been provided in Serial No. 6 of the table therefore, impugned order rejecting refund claim referring to the condition is contrary to the notification. The use of services is not in dispute. In support, he relied on the Hon’ble Supreme Court decision in the case of Commissioner of Customs vs. Dilip Kumar & Company – 2018 (361) ELT 577 (SC) wherein it was held that words in a statute is a clear and unambiguous, the Court is bound to give effect to the said meaning irrespective of the consequences.

Therefore, denial of refund on this count is not tenable and also reliance on the judgment in the case Crystalline Exports Limited vs. CST - 2015 (37) STR 778 (Tri. Mumbai) was placed.
Assesses also submitted that the condition 2(e) of Notification No. 41/2007-ST dated 06.10.2007 prescribes time-limit of 60 days was extended by Notification No. 32/2008 - ST dated 18.11.2008 and if the refund claim was filed within extended period of six months, at the end of the quarter during which the goods were exported, refund claim ought to have been allowed.

Assesses refer the following cases on which refund claim was filed within the period of six months from the end of the quarter:-

KN Resources Pvt. Limited vs. CCE – 2017 (47) STR 303 (Tri. Del.)
Raymonds Limited vs. CCE – 2015 (38) STR 441 (Tri. Mumbai)
Gran Overseas Limited vs. CCE – 2017 (52) STR286 (Tri. Del)
Ruchi Soya Industries Limited vs. CCE – 2017(51) STR 453 (Tri. Del.)

Assesses has also clarified that the storage and warehousing place on rental basis and it was difficult to correlate with actual storage of the exported goods. He also said that the storage areas were exclusively used for export of the goods and therefore in support of his submission he placed reliance on decision in the case Vijay Cotton & Fiber Company vs. CST – 2014 (36) STR 1164 (Tri. Mum.). He further submits that the above judgment was upheld by Hon’ble Bombay High Court reported at CST vs. Vijay Cotton & Fiber Company – 2017 (48) STR 450 (Bom.).

Refund claim denied on GTA service for transportation of goods from the place of removal up to the Port that Lorry Receipts does not mention name of the appellant. Therefore, he clarified that the goods were transported directly from the factory to Port and all the documents related to export were in the name of appellant. The transporter mistake on that the name of assesses was not mentioned in the Lorry Receipts. To support in this case assesses procured certificates from the transporters namely whereby, they certified that invoices was raised to the assesses and paid by them. Merely non-mentioning name of appellant in Lorry Receipts, refund claim ought not to have been denied therefore they are entitled to get refund on these GTA services.

Respondent’s Contention:- He submits that there is time limit of 60 days for filing refund at the end of the quarter. The extension of time from 60 days to six months which was made subsequently cannot be applied retrospectively. They also relied on the following judgments:-

Principal Commissioner of S.T. vs. RR Global Enterprise Pvt. Limited – 2016 (45) STR 5 (A.P.)
RR Global Enterprise Pvt. Limited vs. Principal Commissioner of S.T. – 2017 (3) GSTL J65 (S.C.)
Commissioner of Customs (Import) Mumbai vs. Dilip Kumar & Company – 2018 (361) ELT 577 (S.C.).

Reasoning:- The learned Commissioner (Appeals) denied the refund solely relying upon the Circular No. 106/9/2008 - ST dated 11.12.2008 whereas the same Circular was amended by Circular No. 112/6/2009-ST dated 12.03.2009 whereby it was clarified as under:-

S. No.	Issue Raised	Clarification
VII	The service provider providing services to the exporter provides various services. But he has registration of only one service. The refund is being denied on the grounds that the taxable services that are not covered under the registration are not eligible for such refunds.	Notification No. 41/2007-S.T. provides exemption by way of refund from specified taxable services used for export of goods. Granting refund to exporters, on taxable services that he receives and uses for export do not require verification of registration certificate of the supplier of service. Therefore, refund should be granted in such cases, if otherwise in order. The procedural violations by the service provider need to be dealt separately, independent of the process of refund.

From the amendment in above circular has clear that refund claim cannot be rejected merely because the service provider has not mentioned registration number in their invoices. In these undisputed facts, merely because registration was not mentioned in the invoices it does not mean that appellant has not used the said services for export of goods and judgment relied by the assesses in the case of Crystalline Exports Limited (supra) supports their case. Therefore, rejection of refund on this count is not sustainable.

Regarding the another issue of time-bar in filing the refund claim in as much as that there is no dispute that even though refund is for the quarter October 2007 to December 2007 but the same was filed within six months i.e. on 29.05.2008 from the end of the quarter. The adjudicating authority adjudicated the show cause notice in 31.03.2009 and by which time the period of 60 days was extended to six months. Therefore, the extended period up to six months should have been considered. Accordingly, refund was well within time period of six months and hence does not hit by limitation and same issue involving the same period has been considered by this Tribunal in the case of KN Resources Pvt. Limited (supra) wherein passed the following judgment, which was maintained by the Hon’ble Chhattisgarh High Court reported at 2017 (6) GSTL J147 (Chhattisgarh)it emerges that refund claim filed within a stipulated period from the date of export should be allowed the benefit of refund of service tax paid in export. In which an identical issue has been considered and the benefit extended.

In the above judgment of Tribunal, the clarification issued by CBEC whereby the limitation of one year provided in the amending notification was applied.

Similar issue came before the Mumbai Bench of Tribunal in the case of Raymonds Limited (supra) wherein the Tribunal has passed that the refund could not have been rejected on limitation. The assesses would be eligible for the benefit of refund, subject to condition that refund should be filed within the extended period.

Regarding the refund rejection of service tax of GTA service used for the transportation of goods from ICD to Port, it was an undoubtedly for used for export of goods only and also does not stipulate any condition in Notification No. 41/2007-ST. Refund cannot be rejected on the ground that condition which is not exist in the notification is beyond the jurisdiction of learned Commissioner (Appeals).

As regards the refund rejection in respect of service of storage and warehousing service is not correlation of export of goods. The Hon’ble Bombay High Court has passed the order in the similar issued that the refund claim cannot be rejected on the issue of correlation particularly in the facts of the present case.

Also we find that rejection of the refund claim also on the premise that Lorry Receipts issued by the transporters did not mention name of the appellant. The Lorry receipt does not bear the name of appellant is obviously due to inadvertent mistake on the part of the transporters and also assesses submitted certificated

Ruling:- Appeal allowed with consequential relief
Prepared by CA Mahesh Parmar

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PJ/Case Law/2019-2020/3603

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