M/S.Polyplex Corporation Ltd vs Cce, Meerut-Ii

[Arising out of the Order-in-Appeal No.36/CE/APPL/MRT-II/2013 dated 30.4.2013 passed by the CCE (Appeals), Meerut)

Date of Hearing/Decision: 05.2.2015

For Approval & signature:

Honble Mr.Ashok Jindal, Member (Judicial)

1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it would 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 Department Authorities? Yes

M/s.Polyplex Corporation Ltd. Appellant

Vs.

CCE, Meerut-II Respondent

Appearance

Shri S.C.Kamra, Advocate- for the appellant

Shri V.P.Batra, A.R. - for the respondent

CORAM: Honble Mr.Ashok Jindal, Member (Judicial)

FINAL ORDER NO.50336/2015

Per Ashok Jindal :

The appellant is in appeal against the impugned order denying the refund of service tax used in the export of the goods.

2. The brief facts of the case are that the appellant is manufacturer of their final products i.e. polyester films exported by them. Certain services were availed by the appellant for exportation of the goods. Therefore, after export of these goods, the appellant filed refund claim of service tax paid on the services used for export of their goods. The refund claim was not allowed for the services, namely, Inland Haulage Charges, GTA charges, Ocean Freight charges and On-Carriage charges, THS (Destination) Charges, Carrier Security Services and Courier Service charges. Against the order of denial, the appellant is before me.

3. Learned Counsel for the appellant submits that the appellant has to deliver the goods upto the destination of the buyer of the goods. Therefore, whatever services they availed upto the destination of the buyer of the goods, the appellant is entitled input service tax refund. He further submits that the purchase order obtained by the appellant clearly shows that the goods are to be delivered at the destination of the buyer in the foreign country and they have borne all the expenses incurred on the delivery of the goods and the same is forming the part of the selling price of the goods. Therefore, they are entitled to avail input service credit and consequently the appellant are entitled to refund of service tax paid on the services.

4. He further submits that in the case of Inland Haulage Charges, the refund was denied on the ground that the service provider is required to pay only service tax on a value equivalent to 30% of the gross amount but the service provider charged the service tax on the 100% of value of the amount. Therefore they are not entitled for refund of the same. In respect of GTA service, the adjudicating authority held that the service provider was to charge concessional value i.e. 25% of the gross freight but the service provider charged service tax on 100% of the value of freight. In pursuance to this, it is submitted by learned Counsel that Notification No.17/2009-ST dted7.7.2009 provided that the exemption claimed by the exporter shall provided way of service tax paid not payable. Therefore, in these circumstances, they are entitled to claim refund of 100% service tax paid by them. He submits that for Ocean freight, On-Carriage and Terminal Handling service at foreign port, they are entitled to claim refund as the goods were supplied by them at the destination of buyers of the goods in the foreign country. These charges form part of the value of the goods. For courier service charges, he submits that denial of refund is on the ground that service provider is not a courier agency. To counter this contention, he submits that service provider is M/s.TMT Logistics Pvt.Ltd., who paid courier service charges for sending the material no behalf of the appellant and thereafter raised the bills on the appellant alongwich service tax. Therefore, the appellant is entitled to take refund of the same.

5. Learned AR opposes the contention of the learned Counsel and submits that for Inland Haulage Charges and GTA service, they are not payable by the service provider. Therefore, as per clause (2) (b) of Notification No.17/2009-ST dated 7.7.2009, they are not entitled to refund claim of service tax payable as not paid. For Ocean freight and Terminal Handling (destination) charges, he submits that section 64 of Finance Act, 1994 does not extend territory of foreign country and the Finance Act, 1994 is applicable to whole of India except the State of Jammu & Kashmir. Admittedly these services were availed beyond the territory of India, the appellant is not entitled to claim refund of service tax. For courier service charge, he submits that these charges have not been availed by the appellant in fact this service has been availed by the M/s.TMT Logistics Pvt.Ltd. as the invoices are not in the name of the appellant, they are not entitled to refund claim. He further submits that the ownership of the goods was not in the name of the appellant.

6. Heard the parties and considered the submissions.

7. The facts of the case are not in dispute that the appellant is manufacturing the excisable goods and consequently exporting the same. The appellant is procuring the purchase orders from the foreign buyers wherein the appellant is supplying the goods at the buyers end. The invoices produced before me also show that the goods are required to be delivered at the destination of the buyers. The refund claim of the appellant was denied on the Inland Haulage Service Charges and GTA service charges on the premise that the appellant is entitled to take credit upto the percentage of 30 and 25 respectively. In this case, it is not disputed that the appellant paid service tax on the invoices issued by the suppliers of service and service tax has been paid. Therefore, as per Rule 3 of Cenvat Credit Rules, 2004, the appellant is entitled to take credit of duty/service tax paid by them. Moreover, Notification No.17/2009-ST dated 7.7.2009 also provided exemption claimed by the exporter shall be provided by way of refund of service tax paid on the specified service used for export of the said goods. Admittedly this is specified service as per Notification No.17/2009-ST dated 7.7.2009 the service tax has been paid by the appellant. Therefore, this contention of the ld.AR is not acceptable. In the circumstances, I hold that the appellant is entitled to claim refund on actual service tax paid on Inland Haulage Service Charges and GTA service.

8. With regard to services, namely, Ocean freight, On-Carriage, and Terminal Handling (destination), the argument of the learned AR for the Revenue is that services availed by the appellant outside India, they are not entitled to claim refund of service tax. To claim refund of service tax on services in question provided by the service provider located in India and the service recipient is also located in India. I find that service provider in India was required to be delivered the goods outside India at the destination of the buyers, the charges on the services have to be formed part of the price of the goods in question. Therefore, I hold that the appellant is entitled to claim refund of service tax on these services. With regard to learned ARs contention that the appellant has never said that the goods sold were under the ownership of the appellant till they reached to foreign buyers. This argument of the learned AR is not acceptable as the ownership of the goods remained with the appellant.

9. With regard to courier service charges, I find that the invoices have been raised by M/s.TMT Logistics Pvt.Ltd. for providing courier service thorugh Fedex for transporting the goods and service tax has been paid thereon. Therefore, I hold that the appellant is entited to claim refund of service tax paid on courier service wherein the invoices showed that the appellant has paid service tax.

10. With these terms, I allow the refund claim as claimed by the appellant.

11. I find that the appellant has given up their refund claim in respect of carrier security service. Therefore, refund claim of the same is rejected.

12. With these terms, the appeal is disposed of.

(dictated & pronounced in the open court)

(Ashok Jindal)

Member (Judicial)

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