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.
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