Bola Surendra Kamath & Sons vs Commissioner Of Central Excise And ...

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL:SOUTH ZONAL BENCH:BANGALORE

Appeal(s) Involved: ST/531/2010-SM [Arising out of Order-in-Appeal No. 376/2009 dated 24/09/2009 passed by the Commissioner of Central Excise, Mangalore] For approval and signature:

HON'BLE Mr. B.S.V. MURTHY, TECHNICAL MEMBER

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes

Bola Surendra Kamath & Sons Kedinje, Karkala Appellant(s) Versus Commissioner of Central Excise and Service Tax, Mangalore 7th Floor, Trade Centre, Bunts Hostel Road, Mangalore  575 003 Karnataka Respondent(s)

Appearance:

Ms Asha S.V., CA For the Appellant

Mr. S. Teli, AR For the Respondent

Date of Hearing: 20/03/2015 Date of Decision: 20/03/2015 CORAM:

HON'BLE Mr. B.S.V. MURTHY, TECHNICAL MEMBER Final Order No. 20808 / 2015 Per: B.S.V. MURTHY The appellant is engaged in the export of cashew kernels, gherkins, coffee beans etc. On the services received from commission agents, they had discharged service tax as receiver of service and since they could not utilize the service tax, they filed refund claim on 28.09.2007. The refund claim was not registered but a letter was written to them on 04.10.2007 informing them that the refund claim was not filed in proper format and all supporting documents required were not submitted. Thereafter the appellant filed a reply making good the omissions on 05.01.2008.

2. The refund claim was considered and the claim made in respect of coffee beans and gherkins was allowed and in respect of cashew kernels the refund claim was rejected on the ground that service tax was payable and has been paid correctly. The claim of the appellant was that cashew kernel is an agriculture product and therefore service tax was not payable as per the exemption Notification No. 13/2003-ST dated 20.06.2003. As regards a portion of the refund claim on other items, the same was rejected as time-barred taking the date of filing the refund claim as 05.01.2008.

3. The learned CA on behalf of the appellant submits that the original date of filing the refund claim should have been taken into consideration for the purpose of limitation and therefore the rejection of the part of the refund claim on the ground of limitation may be set aside. The learned CA placed reliance on the decision in the case of Commissioner of Service Tax, Mumbai Vs. Reliance Communication Ltd. [2008 (11) STR 258 (T-Mumbai)]. In this decision according to the learned CA it was held that once an application was rejected for want of proof of supporting documents the revised submission of application is a continuation of earlier application. In view of the above, I agree that the rejection of refund claim on the ground of limitation cannot be sustained.

4. As regards the rejection of refund in respect of service tax paid on commission paid to the agent relating to export of cashew kernels, the learned CA submitted that agricultural produce has been defined under the explanation to the notification. She submits that according to this definition, cashew kernels have to be considered as agricultural produce. She also relies upon the title of the Chapter 8 of Central Excise Tariff which reads edible fruit and nuts. It is her submission that since the heading covers fruit and nuts, cashew kernels also covered under this chapter, cashew kernels have to be treated as agricultural produce.

5. I have considered the submissions. The definition agricultural produce in the explanation reads as under:

(i) agricultural produce means any produce resulting from cultivation or plantation, on which either no further processing is done or such processing is done by the cultivator like tending, pruning, cutting, harvesting, drying which does not alter its essential characteristics but makes it only marketable and includes all cereals, pulses, fruits, nuts and vegetables, spices, copra, sugar cane, jaggery, raw vegetable fibers such as cotton, flax, jute, indigo, unmanufactured tobacco, betel leaves, tendu leaves, rice, coffee and tea but does not include manufactured products such as sugar, edible oils, processed food and processed tobacco. After going through the definition, I am unable to agree with the submission that cashew kernel is covered by this definition. Conversion of cashew nuts to cashew kernel is not a simple process and it is not covered by any of the processes listed in the notification. The definition even provides the processes which can be undertaken but still remain within the category of agricultural produce and the process of drying the cashew nuts removing/peeling the skin, taking out the oil and thereafter grading them is definitely not covered by the processes described in the definition and therefore cashew kernel clearly goes out of the agricultural produce definition. As regards the second claim, it is very clear from the rules for interpretation that classification should not be undertaken on the basis of title but has to be done based on the description for chapter heading/sub heading. Cashew nuts is a separate heading under Chapter 0801 and below that cashew nuts in shell are covered by 0801 3100 and shelled cashew nuts are covered by 0801 32. This would show that cashew kernels and cashew nuts are treated differently even in the tariff. Therefore I am unable to agree with the submission that cashew kernel is an agricultural produce. Therefore the service tax has been paid correctly. Therefore the benefit of notification cannot be extended and service tax has been paid correctly. The appeal is disposed of in the above terms.

(Order dictated and pronounced in open court)

(B.S.V. MURTHY) TECHNICAL MEMBER

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