Case Law Details
Kalpataru Agroforest Enterprises Pvt Ltd Vs Commissioner of CGST & CX (CESTAT Kolkata)
Introduction: The case of Kalpataru Agroforest Enterprises Pvt Ltd Vs Commissioner of CGST & CX revolves around the issue of a service tax refund claim associated with freight charges incurred for exports. It brings into light how the Central Excise and Service Tax Appellate Tribunal (CESTAT) evaluated a situation where the exporter bore the service tax cost.
Analysis: Kalpataru Agroforest Enterprises, the appellant, exported fly ash to Nepal and sought a refund for the service tax they paid on the freight charges. Two refund claims were filed, amounting to Rs. 68,842/- and Rs.70,096/- respectively. The authorities rejected these claims on the basis that the appellant received reimbursement for the Railway Freight from the overseas importer.
However, the CESTAT, in reviewing the case, noted that the total value realized from the overseas importer included the freight charges but did not account for the service tax paid by the appellant. Thus, the service tax had been borne by the appellant, not the overseas importer.
Conclusion: The CESTAT concluded that the lower authorities erred in rejecting the refund claims based on the erroneous assumption of reimbursement from the overseas importer. Since the appellant had effectively borne the cost of the service tax, they were entitled to the refunds claimed.
FULL TEXT OF THE CESTAT KOLKATA ORDER
The appellant has exported fly ash to Nepal and claimed refund claim of Service Tax paid by them for the freight charges incurred in these exports. The Appellants have filed refund claim for Rs. 68,842/-(Appeal No. ST/76964/2019) & Rs.70,096/- (Appeal No. ST/76962/2019). Both the authorities have rejected the refund claim on the ground that the appellant has received the reimbursement for the Railway Freight from the overseas importer. Being aggrieved by the same, the Appellants have filed the present Appeals before the Tribunal.
2. No one appeared on behalf of the Appellants.
3. Perused the documents with the help of Learned AR.
4. He points out that the Appellant has realized the total value from the overseas importer which is inclusive of the freight charges paid to the Railways on account of these exports. However, what is being claimed as refund is the Service Tax paid by the Appellant on such freight charges. It is seen from the records that Appellant has not sought any reimbursement or payment from the overseas importer for the Service Tax paid by him. Therefore, in these two cases, it is clear that the Appellant has borne the Service Tax portion paid by them.
5. Considering the above factual details, I feel that the Lower Authorities have erred in rejecting the refund claim on the ground that Appellant has received reimbursement from the overseas importer. As the Appellant has borne the Service Tax component himself, I hold that he is entitled to get refund of Rs.68,842/- in Appeal No. ST/76964/2019 and Rs. 70,096/-, in Appeal No. ST/76962/2019.
6. Appeals are allowed thus.
(Dictated and pronounced in the open court.)
