Favorable Order on refund of ST amount paid on Ocean freight

Advocate Anand Bhattacharya

Amzole India Pvt. Limited Vs Commissioner, Central Goods and Respondent Service Tax (CESTAT Delhi)

01. The assessee imported certain machines / capital goods and paid custom duties on CIF value of such Imports. During the course of audit the audit team stated that as per Notification No. 30/2012-ST dated 20.06.2012 (as amended by Notification No.15/2017-ST dated 13.04.2017 made effective from 23.04.2017 , Service Tax on Ocean Freight is payable on reverse charge basis and hence the assessee should have paid Service tax on reverse charge basis. Accordingly the assessee paid the amount of tax objected by the audit team on 10.10.2018. Later on the assessee filed refund claim to the tune of BED amount on the ground that since Cenvat Credit of the said BED amount was admissible the assessee may be refunded the said amount in cash in view of provisions of Section 142 and Section 174 of CGST Act , 2017 since the said amount was deposited post GST regime. A show cause notice was issued to the assessee denying the said refund amount.

02. That pursuant to show cause notice, the refund claim was rejected on the ground that Rule 9(1b) of the Cenvat Credit Rules, 2004, does not allow cenvat credit where a supplementary invoice is raised and the tax was not paid earlier by reason of fraud, collusion, wilful misstatement or suppression etc. As regards the contention of the assessee regarding levy of service tax on Ocean freight, the Assistant Commissioner observed that the present dispute is related to refund of credit in cash under GST regime, and hence the issue of eligibility of service tax on Ocean freight is not relevant, accordingly holding that the cenvat credit for the said amount is not available to the appellant in view of Rule 9(1)(b) of Cenvat Credit Rules.

03. That being aggrieved, the appellant preferred appeal before the Commissioner (Appeals) who rejected the appeal upholding the finding of the Assistant Commissioner. Being aggrieved, the appellant is before this Tribunal.

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