Service Tax Appeal No.11218 of 2014-SM
(Arising out of OIA-RJT-EXCUS-000-APP-576-13-14 dated 28/11/2013 passed by
Commissioner of Central Excise, CUSTOMS (Adjudication)-RAJKOT)
Welspun Global Ltd
VERSUS
C.C.E. & S.T.-Rajkot
APPEARANCE:
Shri. S. Suriyanarayanan, Advocate for the Appellant
Shri. Tara Prakash, Assistant Commissioner (AR) for the Respondent
CORAM: HON’BLE MEMBER (TECHNICAL), MR. RAJU
Final Order No. A/ 10044 /2023
DATE OF HEARING: 08.12.2022
DATE OF DECISION: 12.01.2023
Raju
This appeal has been filed by the Welspun Global Ltd against an order
of the Commissioner (Appeals) remanding the matter relating to refund of
Service Tax paid for export of goods under Notification No. 17/2009-ST.
Learned Counsel for the appellant pointed out the issue involved in the
instance case is denial of refund of Service Tax paid under Notification No.
17/2009-ST in respect of the :-
- The foreign Agent commission Service availed by the appellant in
respect of export of goods.
- Banking and Financial Services
- Custom and House Agent Service
2.1 Learned Counsel further pointed out that refund in respect of Service
Tax paid on business promotion of Foreign Commissioner Agent has been
denied. Learned Counsel pointed out that they had availed the said service
of Foreign Commission Agent and paid Service Tax under Business Auxiliary
Service on reverse charge basis. Learned Counsel pointed out that the issue
regarding admissibility of refund in respect of Foreign Commission Agent has
been examined by Tribunal in the case of M/s. VST INDUSTRIES LTD-2017
(10) TMI 24 (CESTAT-HYDERABAD) and in the case of Manner EXPORTs-
2018-4-TMI-66 (CESTAT.-MUMBAI) and in case of BHANSALI
INTERNATIONAL LTD-2017 (7) TMI-1109 (CESTAT-NEW DELHI).
2.2 Learned Counsel pointed out that the refund of Service Tax paid on
Customs House Agent Service has been denied on account of failure of
appellant to produce the original invoices. He argued that CBIC clarification
issued in respect of the Notification No. 41/2007-ST dated 06.10.2007 has
clarified that the production of original is not necessary, Certified copy of the
documents can be accepted. He argued that the said instruction of CBIC has
been ignored by the impugned order. He further argued that the refund of
service tax is paid on Banking and Financial Services have been denied on
the ground that the appellant have failed to correlate the said services
availed by them with the export of goods. He argued that the entire
operation of the appellant relates to export of goods and therefore, the said
services could not have been used anywhere else. In these circumstances
the refund of Service tax should not have been denied.
Learned AR relies on the impugned order.
I have considered the rival submissions.
4.1 The admissibility of refund on Foreign Agent Commission has been
examined by Tribunal in the case of M/s. VST INDUSTRIES LTD. wherein, the
said order following has been observed:-
- I have considered the submissions made by both sides. As already
reproduced herein above, there is no dispute as to the fact, that goods
have been exported and service tax liability has been discharged under
reverse charge mechanism for the commission for the commission paid by
appellant.
- I find that the appellant had filed the refund applications under
Notification No. 17/2009 dt. 07.07.2009 while he should have filed the
refund claim under Notification No. 18/2009. It is the finding of the lower
authorities that appellant had not complied with the conditions of
Notification no. 18/2009 in order to authorities that appellant had not
complied with the conditions of Notification No. 18/2009 in order to
extending the benefit of refund. I find that the first appellate authority has
not mentioned as to which conditions have not been satisfied by the
appellant in order to deny him the benefit of Notification no. 18/2009
which entitles the appellant to claim the refund. I find that Ld. Counsel was
correct in relying upon the judgment of this Bench in the case of M/s.
Coromandel Stampings & Stones Ltd. Wherein identical set of facts arose
before the Bench and after considering the condition so Notification No.
18/2009, he Bench held in paragraph no. 5 as under:
“5. It is submitted by the learned Consultant appearing for the
appellant that all the conditions except the condition that the
appellant has to intimate the concerned Ass/Dy. Commissioner
by filing For,-EXP-1 was not complied. So also, appellant failed
to
submit the reform in Form
EXP- 2 as stipulated in sub-clause (c) of the conditions stated
in the Notification. Needless to say that
exemption/refund/rebate etc. are export oriented schemes. If
the fact of export has been established, refund is not to be
denied on merely technical interpretation of procedure. In
Suksha International Vs UOI 1989(39) ELT 503(SC) the
Hon’ble Apex Court has observed that an interpretation unduly
restricting the scope of beneficial provision is to be avoided, so
that it may not take a way with one hand, what the policy
gives with the other. The Hon’ble Apex Court in Mangalore
Chemicals and Fertilisers Ltd Vs Dy.Commissioner 1991 (55)
ELT 437(SC) while drawing a distinction between procedural
condition of a technical nature and substantive condition, held
that procedural conditions of technical nature can be
condoned. The procedures prescribed in the notification are to
facilitate verification of the claims. Since there is no dispute
with regard to the export made or the service tax paid, the
non-fulfilment of the conditions in my view is condonable.
Following the judgments laid in the above cases, am of the
view that the non-fulfilment of the conditions is only a
procedural lapse and can be condoned. In view thereof, I hold
that the appellants are eligible for refund.”
- In my view, identical issue having been settled by this Bench, ratio
needs to be followed and I do not find any reason to deviate from such a
view. The facts on which the Ld. DR try to distinguish is also not applicable
in the case in hand.
In view of the above refund of Service Tax on Foreign Agent Commission
cannot be denied. Appeal on this count is allowed.
4.2 The second issue involved is rejection of refund in respect of CHA
services were appellant failed to provide the original copy of invoices. The
commissioner (Appeals) in para 6.2 and 6.2.1 has observed as follows:-
“6.2. On the issue of submission of the photocopies of original
invoice, I observe that as per the provisions of rule 4A of the Service
Tax Rules, 1994, and clause 2(i)(D) of the said notification, I am of the
view that the requirement of submission of original invoice/ bill or
challans or any other document issued in the name of exporter,
showing the payment for services availed and specified under the
provisions of said notification, have to be submitted in original.
Further, I observe that due to statutory requirement of rule 4A of the
Service Tax Rules, 1994, the Invoice/ bill/ challans, on which the
refund is sought, has to be mandatorily signed by the person providing
taxable service or by a person authorized by him in respect of such
taxable service. Therefore, it can be clearly inferred that the invoices
are to be submitted in original. The relevant text of rule 4A of the
Service Tax Rules, 1994, and the clause 2(i)(D) of the said notification
are reproduced as follows, for the sake of convenience:
“4A. Taxable service to be provided or credit to be distributed on
invoice, bill or challan- (1) Every person providing taxable service shall
issue, not later than [thirty days] [fourteen days] from the date of
completion of such taxable service or receipt of any payment towards
the value of such taxable service, whichever is earlier, an Invoice, a
bill or, as the case may be, a challan signed by such person or a
person authorized by him in respect of such taxable service [provided
or agreed to be provided][provided or to be provided] and such
invoice, bill or, as the case may be, challan shall be serially numbered
and shall contain the following…….
(Emphasis supplied)
“2(1)(D) Invoice, bill or challan, or any other document issued in the
name of exporter, showing payment for such service avalled and the
service tax payable shall be submitted in original after being certified
in the manner specified in sub-clause (E) and (F).”
(Emphasis supplied)
In this regard, I rely on the decision delivered by CESTAT, Ahmedabad,
in the case of Sky Network Vs. CCE, Rajkot, vide their Order No.
M/2169/WZB/AHD/2012 dated 02.11.2012, wherein, it has been
specifically held as follows:-
“3…….But, unfortunately, due to statutory requirement
invoices are required to be signed by authorized signatory for
availing credit and at the time of passing the stay order also
this point was taken note of and it was also taken note of that
the appellant had got as many as 5 opportunities to produce
the documents. The appellants continued to make the same
submission, knowing fully well that the submissions have not
been accepted, without even looking at the correctness of the
submissions made by them. Under these circumstances, I do
not find any reason for considering the application for
modification…….”
“6.2.1 Thus, in view of above facts and discussion, I uphold the
impugned order passed by the lower authority, to the extend rejecting
the refund claims 15,116/- on the ground that the original copy of
invoices have not being provided by the appellant.”
Learned Counsel relying on the CBEC clarification issued in respect of
Notification No. 41/2007-ST dated 06.10.2007. In Serial No. Vi following has
been clarified.
Learned Counsel argued that they had produced this circular before the
lower authority but no findings have given. It is seen that the observations
of Commissioner (Appeals) are in contradiction with the directions of CBIC.
The order of Commissioner (Appeals) on this count is set aside and matter
remanded to the original adjudicating authority with directions to follow the
Circular of CBIC in this regard.
4.3 The next issue raised in the impugned order relates to denial of refund
of Service Tax paid on Banking and Financial Services. The said refund has
been rejected on the ground that the appellant has failed to correlate the
services availed with the exports of goods. Learned Counsel pointed out that
they are engaged only in the export of goods and there is no other business
therefore, all the services availed are in relation to export of goods. He
pointed out that they had made a specific claim before the lower authority.
All the business of the appellant was export of goods, therefore, no co
relation was necessary as all the services were availed for export of goods.
It is seen that the Commissioner (Appeals) has not taking note of this
observation. If the said assertion is correct then no co-relation may be
required for claiming the refund. However, since this fact has not been
examined by the lower authority. The order of this account is set aside, the
matter remanded to the Adjudicating authority.
The appeal is partly allowed in the above terms.
(Pronounced in the open court on 12.01.2023)
(RAJU)
MEMBER (TECHNICAL)
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