Sponge Enterprises Pvt. Ltd vs C.C.E., & S.T., Raipur

Date of Pronouncement: 08.10.2015

Appeal No. ST/50413-50414/2015-ST(SM)

(Arising out of OIA No. 127/(ST)/RPR/2014 dated 03/11/2014 passed by the Commissioner (Appeals) Central Excise and Service Tax, Chandigarh)

1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it would 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 of the order?

4. Whether order is to be circulated to the Department Authorities?

Sponge Enterprises Pvt. Ltd. Appellant

Vs.

C.C.E., & S.T., Raipur Respondent

Appearance:

Present for the Appellant: Shri Hrishikesh, Advocate

Present for the Respondent: Shri M.R. Sharma, AR

Coram: Honble Ms. Sulekha Beevi C.S., Member (Judicial)

Final Order No.53112-53113/2015

Per: Sulekha Beevi C.S.

1. Appellant is aggrieved by the rejection of refund claim filed as per Notification No. 41/2012 dated 29.6.2012

2. Brief facts are as under:

The appellant is engaged in trading of Iron Ore and occasionally exports the Iron Ore. They filed refund claim of service tax for Rs.16,93,619/- under Notification No. 41/2012 dated 29.06.2012 in respect of Port services, Technical Testing & Analysis Service, GTA service and Banking & Financial Services availed for export of Iron Ore in regard to six shipping Bills of various dates. On verification of the refund claim the Jurisdictional Superintendent noted the following defects.

(i) That appellant had not submitted document under Rule 11 which indicate goods have been removed from the place of removal as under Section 4 (3) (c) of Central Excise Act, 1944.

(ii) That the claim pertains to period 2012-13. The ST-3 return for the period 6/2012 shows that appellant has utilized Cenvat Credit availed on input service, where as in Form-A, appellants have declared that no Cenvat Credit of Service Tax paid on input services used for export will be taken.

(iii) That refund claim is signed by Shri Anand Aggarwal who is authorized signatory and he has attested all documents. But the copy of authorization issued by Board of Directors is not attested and the letter of authorization does not bear signature of Shri Anand Aggarwal. Therefore certificate of authorization is not valid.

(iv) That in case of GTA services, the payment of balance amount is shown as pending with regard to Mahavir Transport, M/s Yash Transport and M/s Trinath Transport which means appellant has not paid fully to the services providers.

(v) The bank realization certificate indicated that amount realized in INR against bill amount raised in US dollars.

3. The adjudicating authority after considering the objections allowed the refund against which department preferred appeal, raising the contention that adjudicating authority has not properly looked into the objections noted by Range superintendent. The Commissioner (Appeals) vide impugned order set-aside the Order-in-Original dated 25.4.2014 and rejected the refund claim. Aggrieved the appellant is before the Tribunal.

4. The learned Counsel for appellant adverting to the Order-in-Original pointed out that the adjudicating authority had sanctioned the refund claim after considering all the objections raised by the Range Superintendent. Moreover, that the objection so raised were merely technical and that substantial benefit cannot be denied for procedural lapses, if any.

5. The learned DR supported the impugned order and argued that the claim has been rightly rejected. Heard both sides and perused the records. Let me now consider the objections raised for denying the refund.

6. The first reason is that the invoices are not proper as under Rule 11 and that place of removal is not shown. In Para 22 of the Order-in-Original the adjudicating authority has noted that he has examined the transport bills, bilties, ledgers of relevant parties and reconciled the same with the Iron Ore Shipping bills. Appellant submitted that all invoices were produced before adjudicating authority and appellant further produced copies of the same before the Commissioner also. With regard to the alleged defect in the invoices that the place of removal is not shown, the learned Counsel for appellant pointed out that, the place of removal is shown as Vishakapatnam. The Bench then asked the DR what is the defect in the invoices and what is the ground for saying that the invoices are not in order as per Rule 11. The learned AR Shri M.R. Sharma was fair enough to concede that the invoices are in order. The observations of adjudicating authority in this regard is noteworthy which is as under:

I have examined the transport documents, bills, bilties, ledgers of relevant parties and reconciled the same with the iron ore description of shipping bills. In this case, export is FOB (Free on Board), therefore, the freight charges upto port is an integral part of the price of such goods. Hence, in view of the above the various place from where the export goods viz. iron ore fines have been transported to the Vizag port is the place of removal in this case and therefore, refund of service tax paid against GTA service for transportation of goods from various places of India (from where the export goods were purchased to Vizag port is admissible to the party (claimant). I also find that in other way, the claimant has also the option of claiming exemption from payment of service tax on GTA service under Notification No. 18/2009-ST dated 07.07.2009 in respect of export goods. The party instead of claiming exemption under Notification No. 18/2009-ST has claimed refund of service tax paid against GTA services used for transportation of Iron ore fines exported under the above Shipping Bills having Bill of lading.

7. Another the reason observed by the Commissioner (Appeals) for denial of refund is that for the Financial Year 2012-2013, the appellant is said to have availed Cenvat Credit pertaining to service tax paid on telephone bill, but these services are not related to export. The learned Counsel pointed out that appellant has not claimed refund pertaining to telephone services. Respondents do not have a case that appellants claimed credit on any of the specified services used for export of goods.

8. A further objection for rejecting refund is that though the refund claim is signed by Shri Anand Agarwal, the authorized signatory, the authorization letter does not contain the signature of Shri Anand Agarwal, although it bears the signature of the Director, Sh. Mukesh Jain. This is explained by the appellant that it might be due to mistake while taking photocopy of the authorization letter dated 14.3.2013. While photocopying the authorization letter which was in Legal Size Paper to an A-4 Size Paper, the signature of Anand Agarwal put at the bottom was left out. The Commissioner took the view that this explanation is an after thought. It needs to mention that there is no dispute that Shri Anand Agarwal is the authorized signatory. All documents and refund claim has been filed by him. Even if there is an omission in the authorization letter as long as the assessee company does not dispute the signatures in the refund claim and documents, the omission is only a technical defect which can be condoned or cured. Rejection of refund claim on such a ground is totally unjustified.

9. From the foregoing, it is seen from the records that the adjudicating authority had properly considered the objections raised by the Range Superintendent. Admittedly the service tax for the impugned services used for export of goods has been paid. In such circumstances denial of refund on technical ground if any is not sustainable, as laid in various judgements. The refund claim is only to be allowed.

10. From the above, the impugned order is set aside. The appeal is allowed with consequential reliefs if any.

(Pronounced on 8.10.2015)

(Sulekha Beevi C.S.)

Member (Judicial)

K. Gupta

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