M/S. Zodiac Clothing Company Limited vs Commissioner, Service Tax, Dn. Ii. ...

[Arising out of Order-in-Appeal No. 173/174 dated 21/5/2013 passed by the Commissioner (Appeals-IV) of Central Excise & Service Tax, Mumbai I]

For approval and signature:

Honble Mr Ramesh Nair, Member (Judicial)

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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : seen of the Order?

4. Whether Order is to be circulated to the Departmental: Yes authorities? =======================================================

M/s. Zodiac Clothing Company Limited : Appellants

VS

Commissioner, Service Tax, DN. II. Mumbai. : Respondent

Appearance

Shri Manoj Chouhan, C.A. for the Appellants Shri A.B. Kulgod, Asstt. Commissioner (A.R.) for the Respondent

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 17/6/2015 Date of decision: 17/6/2015

ORDER NO.

Per : Ramesh Nair

These two appeals are directed against the Order-in-Appeal No. 173/174 dated 21/5/2013 passed by the Commissioner (Appeals-IV) of Central Excise & Service Tax, Mumbai I, wherein the Ld. Commissioner rejected the Appeals of the Appellant involving refund of service tax paid on the services used in the export goods under Notification No.41/2007-ST and Notification No.17/2009-ST.

2. The Appellants refunds in respect of services namely Commission paid to overseas export commission agent and Banking & Financial services was rejected on the grounds that the Appellant availed the drawback facility under Customs, Central Excise Duties and Service Tax Drawback Rules, 1995, refund claim was filed beyond the stipulated time period of 6 months as prescribed in the Notification No.41/2007-ST and in respect of Commission agent service there is no nexus between the export and the said service.

3. Shri Manoj Chouhan Ld. Chartered Accountant appearing on behalf of the Appellant submit that as regard availment of drawback, this condition was omitted in the notification No.41/2007-ST vide amendment notification No.33/2008-ST dated 07.12.2008 therefore the refund for the period on or after 07.12.2008 is admissible. This submission was categorically made before the Commissioner (Appeals) but he has neither considered nor given any finding on this aspect. He submits that after 07.12.2008, since no condition related to drawback exists, the refund claim for the period after 07.12.2008 could not have been rejected on this ground. As regard time bar, he submits that in the first appeal the amount claimed at present is Rs.9,81,612/- which was filed on 31.03.2009 which pertains to the quarter ending December, 2008 and as per the Notification No.41/2007-ST, the refund application should be made within six months from the end of the quarter to which the exports relate. Therefore in the present case the refund should have been filed on or before 30th June, 2009, whereas the claim was filed on 31.03.2009, hence it is well within the stipulated period of six months.

Regarding nexus of services with the export, he submits that the Appellants submit the Annexure C with this appeal wherein the nexus has clearly been established. In the second appeal related to refund of Rs.16,17,016/-, as regard reasons of rejection on the ground of drawback availment and nexus, he adapted the submission as made above. Regarding time bar, he submits that the Ld. Commissioner considering Public Notice 07/2010 dated 04.03.2010 (Boards Letter F.No.354/256/2009-TRU) held that refund claim was filed prior to 07.07.2009 and as per the conditions of the public notice one condition of filing claim within one year was complied with but second condition that no previous refund claim should be filed under the previous notification, has not been complied with as refund claim was filed under notification No.41/2007-ST. He submits that the present refund claim of Rs.16,17,016/- was filed on 31.03.2010, hence the contention of the Ld. Commissioner that the refund was filed before 07.07.2009 is factually incorrect. Moreover, at the time of filing refund on 31.03.2010, notification no. 41/2007-ST was not in existence, hence question of filing refund claim under the said notification does not arise.

Therefore it is not correct to say that the refund claim in the present appeal was filed under previous notification.

4. On other hand, Shri A.B. Kulgod, Ld. Assisstant Commissioner (AR) reiterates the findings of the impugned order. He further submits that as per the Ld. Counsels submissions, the Ld. Commissioner and Adjudicating Authority have not considered the relevant factual aspects, it will be proper if the matter is remanded for reconsideration of the matter.

5. I have carefully considered the submissions made by both the sides. The present two appeals filed by the Appellants related to refund of Rs.9,81,612/- and Rs.16,17,016/-. Appeals in respect of refunds including the above two amounts were rejected by the Ld. Commissioner appeals on the following grounds:

(i) The appellants have availed drawback by which contravened the condition of the notification no. 41/2007-ST.

(ii) The refund claim is time barred as the same was filed by the appellants beyond the stipulated time of six months.

(iii) The nexus in respect of commission with exports service could not be established.

From the records and submissions made by the Ld. Counsel. It is observed that both the refund claims pertaining to the period after 07.12.08, and the condition of non-availment of drawback had been omitted vide the notification no. 33/2008-ST dated 07/12/08 therefore I am of the view that refund in the present case which is for the period on or after 07/12/2008 should not have been rejected for the reason that the appellants had availed drawback. During the period on or after 07/12/2008 the condition of non availment of drawback was not existing. As regard time bar I observed that first claim of Rs. 9,81,612/- is for the quarter ending December, 2008 and refund application could have been filed by 30th June, 2009 whereas the appellants refund claim was filed on 31/03/2009 which is well within the time period as stipulated in the Notification No.41/2007-ST. Therefore Ld. Commissioner wrongly rejected the claim on time bar. As regard nexus of commission service with the export I am of the view that the service is of overseas commission agent who provides services exclusively related to export of goods, therefore even by stretch of imagination it cannot be said that overseas commission agents service is used for the purpose other than for export.

The Appellants also submitted details in AnnexureC to this appeal which establish the nexus between the commission agent service and export goods. As regard the rejection of refund claim of Rs. 16,17,016/- on the ground of time bar I have observed that the Appellants have admittedly filed the refund claim on 31/03/2010 i.e., after the issuance of Notification No. 17/2009-ST, therefore the refund claim deemed to have been submitted under Notification No. 17/2009-ST, The Ld. Commissioner (appeals) gravely erred, firstly mentioning that the application was filed before 07/07/2009 which is factually incorrect and secondly when refund claim was admittedly filed on 31/03/2010, it was wrong on the part of Commissioner to hold that the Appellants have filed refund claim under the previous notification no.41/2007-ST and for this reason benefit of public notice No.07/2010 dated 04/03/2010 was not extended to the Appellant. In view of my above observations, I am of the view that the Appellants are legally entitled for the refund as claimed before this Tribunal. However, it appears that both the lower authorities have not carefully verified the above discussed facts therefore committed serious error in rejecting the refund of Rs.9,81,612/- and Rs.16,17,016/-.

5.1 As per my above observation and discussions, I find that since the lower authorities have failed to consider the above factual aspects, matter needs to be remanded for reconsideration. I, therefore, remand the matter to the original adjudicating authority for passing a fresh order keeping my above observations in mind and after verification of the factual submissions made by the appellants.

(Dictated in court)

Ramesh Nair Member (Judicial) sk

6 APPEAL NO. ST/88687, 89621/13