J.J. Exporters Limited (Eou Unit 1 & Unit ... vs Commissioner Of Customs And Service ...

[Arising out of Order-in-Appeal No. 11/2009 dated 21/01/2009 passed by the Commissioner of Customs, Bangalore]

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? No 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

J.J. Exporters Limited (EOU Unit 1 & Unit 2) No.12, 1st Cross, 2nd Block, Industrial Suburb, G.G. Palya, Bangalore Appellant(s) Versus Commissioner of Customs and Service Tax, Bangalore C. R. Building, Queens Road, P.B. No. 5400, Bangalore  560 001 Karnataka Respondent(s)

Appearance:

Mr. H.Y. Raju, Advocate #999/30, Nithya Mansion 1st Floor, 1st Main, 4th Cross, Vijayanagar, Bangalore  560 040 For the Appellant

Mr. A.K. Nigam, AR For the Respondent

Date of Hearing: 02/03/2015 Date of Decision: 02/03/2015 CORAM:

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

Final Order No. 20461 / 2015

Per: B.S.V. MURTHY

Refund of accumulated cenvat credit of Rs. 94,381/- (Rupees Ninety Four Thousand Three Hundred and Eighty One only) claimed by the appellant has been rejected on two grounds namely (1) the documents are not in the name of the appellant (2) there is no nexus between input services and the final product manufactured by the appellant.

2. Learned counsel submits that it is not correct to say that documents were not produced. In this case the bills were received by their Head Office and credit was distributed. As regards nexus part he submits that bank charges and CA service were utilized for the purpose of operations of the appellants unit which is engaged in the manufacture and export and is a 100% EOU. Clearing and Forwarding service and CHA service are also relatable to manufacture and clearance of the goods.

3. Learned AR would support the impugned orders.

4. I have considered the submissions made by both the sides. According to the definition input services means any services used by the manufacturer, whether directly or indirectly in or in relation to the manufacture of final products and clearance of final products, up to the place of removal. It cannot be said that expenses incurred towards bank charges, clearing and forwarding, CHA service, commission paid to the agents are not up to the place of removal. If the bank charges are not incurred and commission is not paid to the agent, the clearance itself cannot take place. Therefore it cannot be said that these services have not been utilized in or in relation to the manufacture and clearance of final products. The learned AR relied upon the decision in the case of Kbace Tech Pvt. Ltd. Vs. CST, Bangalore [2010 (18) S.T.R. 281 (Tri.-Bang.)] to submit that documentary evidence should be produced. In this case I am dealing with the claim for refund. On going through the paragraph 4 of the order-in-original, I find that there is no observation that the documents on the basis of which credit has been taken have not been produced.

Therefore the issue is one of admissibility of credit on the input services received by the appellant and the documents not being in the name of the appellant. In the impugned orders other than saying that bills are not in the name of the appellant, there is no other observation at all. It is not even possible to conclude that documents are not in the name of the appellant in view of the clear finding that refund claim was not defective but had all the requirements fulfilled. In such a scenario, the observations that the bills are not in the name of the unit is not supported by facts. The appellant has taken credit on the basis of invoices issued by Input Service Distributor and on going through one of the invoices I find that the invoice appears to fulfill the requirement of the law. The bills give name of the Input Service Distributor, address and the details of credit passed on with the details of service providers and the credit in the annexure. That being the situation, denial of the credit and the refund thereof on the ground that the bill is not in the name of the unit appears to be not sustainable.

In the absence of any consideration whatsoever other than a bland observation that bills are not in the name of the unit and in view of the submission that very same documents were used by the appellant for taking credit the obvious conclusion is that appellant has taken credit on the basis of invoices issued by ISD and therefore what is required to be examined while considering the refund claim was correctness of the ISD invoice whether it had the required details or not. The learned counsel claimed that there is absolutely no defect in invoice. Further I also find that expenses like bank charges, CA services, CHA services, Cargo Services etc are required and can be considered in or in relation to manufacture and clearance of final products unless the contrary is proved which is not the case here. Under the circumstances, the matter in any case has to be remanded since the refund claim has to be considered afresh. Since there is no discussion at all about ISD invoice and the correctness thereof, the original authority is directed to consider whether ISD invoice is in accordance with law or not.

Further the appellant may also produce some evidence to show that what kind of expenses were incurred and what kind of services were received and how they are related to the final product by giving the brief note. Based on the brief note and documents, original authority may consider refund claim afresh and pass order in accordance with law. Obviously original authority shall consider precedent decision applicable to facts of this case while coming to a conclusion. If any refund claim is being denied in respect of any ground, the detail reasoning as to why that is being denied and provision of the law applied should be explained clearly.

(Order pronounced in open court)

(B.S.V. MURTHY) TECHNICAL MEMBER

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