M/S.Shiva Utensils Industries Pvt.Ltd vs Cce, New Delhi

(Arising out of OIA No.53/ST/DLH/2013 dt.26.2.13 passed by the CCE (Appeals), Jaipur)

Date of Hearing/Decision: 07.05.2015

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.Shiva Utensils Industries Pvt.Ltd. Appellant

Vs.

CCE, New Delhi Respondent

Present for the Appellant: Shri Abhey Mishra, Advocate

Present for the Respondent: Shri Devender Singh, AR

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

FINAL ORDER NO.51604-51607/2015

PER: ASHOK JINDAL

The appellant are in appeals against the impugned order rejecting the refund claims filed by them under Notification No.17/09-ST dt.7.7.2009.

2. The facts of the case are that the appellants are manufacturer of steel utensils and exporter of the same. The appellants filed certain refund claims under Notification No.17/09-ST dt.7.7.2009 for the service tax paid in respect of specified services received and used for the export of their final products from their factory. The said refund claims were examined on the basis of credit taken on the input services on the invoices issued by M/s.Exim Transtrade (India) Pvt.Ltd, M/s.R.R.Cagro and M/s.Team Global Logistics Pvt.Ltd. The above named suppliers of services registered under CHA services. It was observed by the Revenue that as the suppliers of services are registered under CHA services, therefore, they are required to issue invoices for agency services and not on the reimbursable expenses such as port fees, landing and container charges, dock fees, examination charges, terminal handling charges etc. for which the suppliers of the services are not registered. The refund claims of the said services supplied through above named suppliers are not entitled for refund claim, therefore, the refund claims rejected by both the lower authorities. Aggrieved with the said orders, the appellant is before me.

3. Learned Counsel appearing on behalf of the appellant submits that the suppliers of services are registered under CHA services but the appellant employed them for all the logistic services and also issued invoices to the appellant for the services provided by them and service tax has been paid on these services. Therefore, as per CBEC Circular No.106/9/2008-ST dt.11.12.2008, the refund cannot be denied. He further submits that it is not in dispute that the appellant has paid service tax on the services provided by the service providers and the same has been used by the appellant for export of their goods. Therefore, they are entitled to claim refund of service tax paid by them as held by this Tribunal in the case of Durhan Spintex & Holding Pvt.Ltd. vs. CCE, Ahmedabad-2012 (28) STR 366 (Tri.-Ahmd.), Dishman Pharma & Chemicals Ltd.-2011 (21) STR 246 (Tri.), Indoworth (India) Ltd. vs. CCE, Nagpur-2012 (25) STR 78 (Tri.-Mum.) and Sunflag Iron & Steel Co.Ltd.-2010 (20) STR 213 (Tri.-Mum.).

4. On the other hand, ld.AR objected the contention of the learned Counsel and submitted that the Commissioner (Appeals) has analysed the issue in detail and held that the impugned services have been provided by the CHA and the same has been classified under the head of agency services. Therefore, classification of the services which are impugned in question, is wrong and the same cannot be termed as agency services and no proper invoices have been obtained by the appellant from the actual service providers. He further submits that CBECs circular relied upon by the appellant has clarified that it should be ensured that the invoices/challans/bills issued by the supplier of taxable service should contain requisite details, and refund claim cannot be allowed on the basis of not having complete details as required verification cannot be carried out by the department on the basis of incomplete invoices. As in this case, the invoices issued by the Customs House Agencies does not have proper classification and does not have details of actual service providers in whose name the actual service providers issued the invoices. Therefore, the refund claim is not admissible.

5. Heard the parties and considered the submissions.

6. I have gone through the CBECs circular No.106/9/2008-ST dt.11.12.2008 which clarified as under:-

CLARIFICATION: The invoices/challans/bills issued by supplier of taxable service, in conformity with rule 4A of the Service Tax Rules, 1994, are reasonable evidence that the services on which refund is being sought are taxable service. The Compliance of condition that exporter has actually paid the service tax rests with the exporter claiming refund. Therefore, in so far as this condition is concerned, the refund claim should be processed based on furnishing of appropriate invoices/bills/challan by the person claiming refund and undertaking to the effect of payment of service tax by him. For the purposes of compliance verification, random checks should be carried out independently and where the refund amount is significant, post refund audit may also be carried out.

As regards incomplete invoices/bills etc., rule 4A of the Service Tax Rules, 1994 prescribes the statutory requirement. Compliance of this rule requires that the invoices/challan/bills should be complete in all respect. Therefore, the exporter claiming refund of service tax under notification No.41/2007-ST should ensure in their own interest that invoices/bills/challan should contain requisite details(name, address and registration No. of service provider, S.No. and date of invoice, name and address of service receiver, description, classification and value of taxable service and the service tax payable thereon). Refund claim cannot be allowed on the basis of invoices not having complete details as required verification cannot be carried out by the department on the basis of incomplete invoices.

7. As per the said clarification, the only requirement is that the exporter actually should have paid service tax and services have been received by the exporter which are to be mentioned in the invoices issued by the service provider. It is immaterial that service provider is registered in some other category and he has provided some other services. I further find that this issue has been examined by various judicial pronouncements relied upon by the learned Counsel.

8. In the case of Durhan Spintex & Holding Pvt.Ltd. vs. CCE, Ahmedabad (supra), this Tribunal has observed as under:

The refund of service tax claimed on port services has been rejected on the ground that the appellant have not got invoice from the service provider but from the CHA and also for the reason that the service provider was neither the port nor authorised by the port. It was submitted by the appellants that the CHA has acted as a pure agent and has collected the amount from them and paid to the service provider and appellants have provided all the documents and proof of payment of service tax and therefore they are eligible. The very same issue had come up before the Tribunal earlier and this Tribunal has taken the view that in respect of port service, THC charges, REPO/BL charges etc. Whether service provider was authorised or not, if the service tax has been paid towards port service, while granting refund, the refund sanctioning authority cannot sit in judgment to say that the service received was not port service. Once the services are covered under the statutory definition of port service and service tax has been paid, refund is admissible.

9. In the case of Dishman Pharma & Chemicals Ltd (supra), this Tribunal has observed as under:-

It is also contended by the Revenue that the service providers were registered under the category of Business Auxiliary Services and not under the Port services/CHA services. However, I find that above issue stands clarified by the Board vide its Circular No. 112/6/2009, dated 12-3-2009. Vide serial No. 7 of the table attached to the said circular, it stands clarified as under :-

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 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.

4.?As such the Revenues contention that service provider was registered under different category cannot be made a basis for denial of refund to the appellant.

10. This issue was further examined in the case of Indoworth (India) Ltd. vs. CCE, Nagpur (supra), wherein this Tribunal observed as under:-

6.?I have carefully considered the submissions made by both sides and perused the records. The appellants claimed refund of Service Tax under Notification No. 41/07-S.T., dated 6-10-2007. The appellants have paid Service Tax on specified services used for export of goods. The goods have been exported and the Service Tax was paid on input services for which refund has been claimed. The above facts are not in dispute. I find that both the lower authorities have rejected the refund claim on the ground that in case of CHA services, the name figuring on shipping bill is different from the name of CHA who has paid the service Tax. In case of refund relating to Service Tax paid on Bill of lading, the refund claim has been rejected on the ground that service provider is registered under Business Auxiliary Services, whereas the benefit has been claimed under port services. Board Circular No. 112/6/2009-S.T. dated 12-3-2009 provided certain clarifications in the case of refund under Notification No. 41/07. Clarification-VII is reproduced herein as under for convenience of reference: -

Sl. 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 above, it follows that granting refund to exporters on taxable services that he received 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.

7.?The Tribunal in the case of Sunflag Iron & Steel (supra) on similar issue held that once Service Tax paid is not disputed the assessee is entitled to take refund of Service Tax paid by them in terms of Notification No. 41/2007. In the case of Ramdev Foods (supra), the Tribunal held that while collecting the service tax on the said services, the same stands considered as port Services, therefore, the same cannot be held otherwise while granting the refund.

11. This issue was again examined in the case of Sunflag Iron & Steel Co.Ltd. (supra) wherein this Tribunal observed as under:-

Further the refund claim of Port Services of Rs. 52,813/- claimed by the Appellant have been rejected on the grounds that the documents have been found invalid. Payment of Service Tax is not disputed. The dispute is that the service provider is one Agency and the Service Tax stated to be paid by other. Further it is not disputed that the Appellant have not paid the Service tax. Simply for the technical reasons the refund cannot be denied.

It is not disputed that the respondent has not paid the Service tax it is also not disputed that the respondent is not entitled to take the refund of Service tax paid by the respondent as per Notification No. 41/2007-S.T., dated 6-10-2007.

12. In this case also the invoices issued by the service provider have been mentioned services which have been provided by the service provider in detail and detail regarding the services received by the appellant are mentioned in the invoices. It is also not disputed that the appellant has received the services and paid service tax thereon. In the circumstances, relying upon the above said decisions, I hold that the appellant is entitled for the refund claim. With these terms, I set aside the impugned orders and allow the appeals with consequential relief.

(Dictated & Pronounced in the open court)

(ASHOK JINDAL)

MEMBER (JUDICIAL)

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