CESTAT, MUMBAI BENCH
Crown Products (P.) Ltd.
Commissioner of Central Excise, Nashik
FINAL ORDER NOS. A/60-61/2012-WZB/C-IV (SMB)
STAY ORDER NOS. S/136-137/2012-WZB/C-IV(SMB)
MISC. ORDER NO. M/47/2012-WZB/C-IV(SMB)
APPLICATION NOS. ST/STAY/2110/201 & ST/678/2010 & ST/COD/2045/2010
APPEAL NOS. ST/622 & 678/2010-MUM.
Date of Pronouncement- 20.04.2012
1. The appeals, condonation of delay applications and stay applications are directed against Order-in-Appeal Nos. AKP/132 & 133/NSK/2010, dated 29-4-2010 passed by the Commissioner of Central Excise & Customs (Appeals), Nashik. Against the said order the appellant filed a composite appeal and they were directed by the Registry to file separate appeals. Composite appeal was filed in time and there was a delay of 96 days in filing a separate appeal. Considering the reason for delay in filing a separate appeal is satisfactory, I allow the application for Condonation of Delay.
2. The issue for consideration of the case is as follows :
2.1 The appellant is a merchant exporter of food items and he has engaged the services of a transporter and a CHA for transport of the goods from the place of removal to the port of export and discharged service tax liability on the GTA services. In respect of the CHA service, the CHA paid the service tax and the appellant claimed refund of the same inasmuch as the goods was exported, by following the procedure under Notification No. 17/2009-S.T., dated 7-7-2009. The lower adjudicating authority allowed the refund claim. The Revenue filed an appeal before the Commissioner (Appeals) stating that Notification No. 33/2004-S.T., dated 3-12-2004 exempted GTA services in respect of foods and vegetables unconditionally and, therefore, the appellants are not required to discharge service tax liability and the payment made us under mistake of law. What is deposited with the department cannot be considered as tax but it is a deposit with the Government, hence the appellant’s claim for refund under Notification No. 17/2009 is not admissible to them. This plea of the Revenue was accepted by the Commissioner (Appeals) vide impugned order and the lower appellate authority passed an order denying them the refund of service tax paid on GTA services under Notification No. 17/2009 are deposit with department and the issue of refund of such amount the appellants are free to agitate before proper departmental authority. Hence the appellant is before me.
4. The learned Advocate for the appellants says that this is an export transaction and the objective of the Government is to relieve the burden of taxes in respect of exports so as to make the exports competitive in the international market. That is why Notification No. 17/2009 was issued so that tax burden could be relieved. Therefore, by asking the appellant to prepare a separate claim under Section 11B in respect of the GTA services, it does not sub-serve the objective of the Government and on this ground alone the order of the appellate authority needs to be set aside.
5. The learned A.R. appearing for the Revenue on the other hand reiterated the findings of the lower authority and submits that when exemption is granted for the particular services the assessee has to avail the exemption and not apply for the refund.
6. I have carefully considered the rival submissions.
7. After hearing the arguments, I am of the view that the appeals themselves can be disposed of at this stage. Accordingly, after granting stay, I take up the appeals for disposal.
8. The short issue for consideration is whether the appellants could have paid tax on an exempted services and claimed refund under Notification No. 17/2009 which allows refund of tax paid on services used in or in relation to the export of goods. The learned appellate authority has held that when a service is exempted, the appellant cannot pay the taxes and thereafter claim refund of the same on the ground that it is in connection with export purposes.
8.1 Section 5A(1A) of the Central Excise Act, 1944 read as follows :-
“For the removal of doubts, it is hereby declared that where an exemption under sub-section (1) in respect of any excisable goods from the whole of the duty of excise leviable thereon has been granted absolutely, the manufacture of such excisable goods shall not pay duty of excise on such goods.”
and this particular provision of law prohibiting payment of tax in respect of exempted goods does not apply to service tax. The exemption for service tax purpose under Section 93 of the Finance Act, 1994 which reads as follows :-
“If (1) the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, exempt generally or subject to such conditions as may be specified in the notification, taxable service of any specified description from the whole or any part of the service tax tenable thereon.
8.2 There is no clause barring an assessee from paying tax on exempted services and claiming refund thereafter in the Finance Act, 1994 unlike in the case of payment of duty under the Central Excise Act. In view of the above position, the findings of the lower appellate authority that the assessee could not have claimed refund under Notification No. 17/2004 is not correct in law.
9. Accordingly, I set aside the impugned order and allow the appeals with consequential relief if any.