Case Law Details
Sethia Oils Ltd. Vs Commissioner of CGST & Excise, Kolkata North (CESTAT Kolkata)
The CESTAT, Kolkata in the matter of M/s Sethia Oils Ltd. v Commissioner of CGST & Excise, Kolkata North [Final Order No.75397/2022 dated July 13, 2022] has held that rejection of refund claimed by the exporter on flimsy grounds would defeat the purpose of rebate scheme and traps the exporters under unnecessary litigations.
Facts:
This appeal has been filed by M/s Sethia Oils Ltd (“the Appellant”) against the Order- in- Appeal (“the Impugned Order”) passed by the Commissioner (Appeals) of CGST & Excise, Kolkata rejecting the refund claimed by the Appellant on the ground that exporter should be registered with the “Export Promotion Council” and being registered with “the Solvent Extractor’s Association of India” which is a Trade Promotion Organisation (“TPO”) ,would be of no help in getting the benefit of the Provision as per Para 3(h) of [Notification No.41/2012-ST dated June 29, 2012– (Rebate of service tax paid)]. Aggrieved by the impugned order, the Appellant filed an appeal in the CESTAT.
The Appellant contented that they are registered with TPO recognized and sponsored by the Government of India, Ministry of Commerce for export of “De-Oiled Rice Bran” and hence the condition of Provision as per Para (3)(h) of the Notification No.41/2012-ST dated June 29, 2012 was satisfied.
Issue:
- Whether the Appellant is eligible for the refund claim without having registration with “Export Promotion council”?
Held:
The CESTAT, Kolkata in [Final Order No.75397/2022 dated July 13, 2022] has held as under:
- Observed that, there is no dispute that the goods were exported by the Appellant, and Service Tax was actually paid on export activity, in terms of the broad scheme of refund. Accordingly, refund must be granted to the Appellant.
- Stated that, the sole intention of the government to bring out these rebate schemes is to promote the exporters to compete with the global market exporters.
- Held that, the Impugned Order cannot be sustained as substantive benefit should not be denied to Appellant if the conditions are fulfilled and rejecting refund on flimsy grounds would defeat the purpose of rebate scheme and trap the exporters under unnecessary litigations.
FULL TEXT OF THE CESTAT KOLKATA ORDER
The facts of the case in brief are that vide Order-in-Original No.R/126/ST/DIV-I/Kol/2012-13 dated 17.12.2012, the Deputy Commissioner, Division I, Service Tax Commissionerate, Kolkata, sanctioned refund of Rs.5,07,293/- being the service tax amount paid on the input services utilised for export of goods made under 26 shipping bills of export as claimed by the appellant assesse. Subsequently, the order-in-original was reviewed by the Commissioner of Service Tax, Kolkata vide Review Order No.47/Review/Divisional/ST/Kol/2012-13 dated 14.03.2013. It was observed that since the claimant is not registered with the Export Promotion Council sponsored by the Ministry of Commerce, therefore, the appellant is not entitled for refund in terms of provision 3 (h) of Notification No.41/2012-ST dated 29.06.2012. In view of the Review Order, the appeal was filed before the First Appellate Authority. The Ld.Commissioner (Appeals) allowed the appeal filed by the Department. The ld.Commissioner (Appeals) observed that the exporter should be registered with the Export Promotion Council and being registered with “The Solvent Extractors’ Association” of India,, which is a Trade Promotion Organisatiion (TPO), would be of no help in getting the benefit of the said Notification and he allowed the appeal. Thus, the present appeal by the appellant before the Tribunal.
2. The ld. Authorized Representative appearing on behalf of the Appellant Company, has filed a written submission along with copies of relied upon decisions. It is her submission that (3) (h) of the said Notification reads as “the exporter is registered with the Export Promotion Council sponsored by Ministry of Commerce or Ministry of Textiles…” It is her further submission that this is not the principal condition as laid down in the said Notification. She further submits that no show-cause notice was issued by the Department before sanctioning of the refund claim and there was no question regarding the appellant not being a member of an Export Promotion Council. She further submits that they are registered as member of The Solvent Extractors’ Association of India which is a Trade Promotion Organization (TPO) recognized by the Government of India, Ministry of Commerce for export of “De-Oiled Rice Bran” and was sponsored by the Government of India, Ministry of Commerce and hence the condition (3)(h) of the Notification No.41/2012-ST dated 29.06.2012 was satisfied. The appellant has also submitted that as a protective measure, they had also taken membership from Federation of Indian Export Organizations (FIEO) for the financial year 2012-13. They have also referred to Para No.2.64.1 of the Foreign Trade Policy, which says that “RCMC shall be deemed to be valid from 1st April of the licensing year in which it was issued and shall be valid for five years ending 31st March of the licensing year, unless otherwise specified.”
3. The Ld.D.R. appearing on behalf of the Revenue, justified the impugned order and submitted that registration with the Export Promotion Council is a mandatory condition and hence, the impugned orer should be upheld and the appeal filed by the appellant being devoid of any merit, be dismissed.
Service Tax Appeal No.76091/2018
4. Heard both sides and perused the appeal records.
5. On perusal of records, I find that the Deputy Commissioner of Service Tax has passed a detailed order incorporating shipping bill numbers, date, name of service provider, invoice numbers etc. and in short, he has gone through all the documents and has discussed the conditions of the said Notification or eligibility of refund claim and after making point-wise observation and has finally sanctioned the refund. The ld.Commissioner (Appeals) has allowed the appeal before him mainly on the ground that though the appellants are a member of Solvent Extractors’ Association of India, which is a Trade Promotion Organizaion (TPO) recognized by the Government of India, Ministry of Commerce for export of “D-Oiled Rice Bran” and was sponsored by the Government of India, Ministry of Commerce, but they did not satisfy the condition of (3)(h) of the Notification No.41/2012-ST dated 29.06.2012 as laid down.
6. It can be seen that there is no dispute as to the fact that the goods were exported by the appellant-assessee. Once it is not in dispute that the services are specified for refund purpose, and since Service Tax was actually paid on specified services pertaining to export activity, in terms of the broad scheme of refund under Notification No.41/2012-ST dated 29.06.2012 (supra) as amended with clarifications, refund must be granted to the exporter. It is my considered view that the order passed by the Learned Commissioner (Appeals) cannot be sustained as substantive benefit should not be denied to an assessee if the conditions are fulfilled. It would not be out of place to mention that the sole intention of the Government to bring out these rebate schemes is to promote the Indian exporters to enjoy a level playing field and to compete with the exporters of other countries in the global market. Further, it is not the intention of the Government to export taxes, hence after much research these schemes have been notified and if the refund claims are rejected on such flimsy grounds, it defeats the very purpose of rebate schemes and traps the exporters under unnecessary litigations.
Service Tax Appeal No.76091/2018
7. As a result of entire above discussion, I do not find order under challenge as reasonable and justifiable and accordingly, I set aside the same. Consequently, appeal stands allowed with consequential benefit, if any.
Dictated and pronounced in the open Court.
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