Service tax exemption cannot be denied for belated filing of declaration EXP-1, EXP-2

Makson Healthcare Pvt. Ltd. Vs CGST C.E & C.C (CESTAT Delhi)

CESTAT Delhi has held that exemption under Notification No. 31/2012-ST, to transportation of goods from factory to the gateway port, cannot be denied for belated filing of declaration EXP-1, EXP-2.

I find from perusal of Form EXP-1 that it is in the nature of general declaration containing the name of exporter, registration number, STC No, Jurisdiction detail of the ST, Membership number of export council, name of the export council, address of the registered office, telephone number, IEC code, details of bank account, and the declaration that the exporter shall comply with conditions laid down in the said notification and in case of any change in the aforementioned particulars, shall intimate the same to Revenue. On filing the declaration the Assistant Deputy Commissioner in required to enter the same in a register maintained giving the acknowledgment number and the date of receipt. From the perusal of the form EXP-I, find that it is not required to be given with each consignment, as the form does not contain the details of the particular consignment. Thus, I hold that once form EXP­1 is filed it is valid till there is variation in the case of the exporter, of the details contained therein. Accordingly I hold that for admitted delay of about 22 days in filing form EXP-2 the benefit of exemption from service tax for admitted export of goods, cannot be denied.

FULL TEXT OF THE CESTAT JUDGEMENT

1. Heard the parties.

2. The issue in this appeal is whether the transport services availed by the appellant for export of their goods from their factory to the gateway port having rightly been denied under Notification No. 31/2012-ST for the reasons that the prescribed declaration EXP-1, EXP-2 have been filed belatedly.

3. The appellant is a manufacturer of vicks drop and regularly exports their   products. The manufacturers have been allowed the facility of exemption from service tax in respect of the goods exported, all throughout, under the scheme of Service Tax Act and Rules, read with relevant notification. Notification No. 31/12/ST was issued on 20^th June, 2012 which was in supersession of the earlier notification No. 18/2009-ST dated 07/07/2009, which provided that the Government being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable service received by an exporter of goods (hereinafter referred to as exporter) and used for export of goods of the description as given in the table from the whole of the Service Tax leviable thereon under Section 66B of the Finance Act subject to the conditions as provided in column 3 of the table in the said notification, which reads- the exporter shall have to produce the consignment note, by whatever name they call, issued in his name. The services prescribed as service provided, to an exporter for transport of the said goods by a GTA, in a goods carriage from any CFS or ICD to the port or airport, as the case may be, where the goods are exported or the & service provided to an exporter by GTA, from the place of removal to an ICD/CFS/Port or Airport. The said notification by way of proviso, further provides the following conditions for availing the exemption :-

(a) The exemption shall be available to an exporter who,-

(i) Informs the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, having jurisdiction over the factory or the regional office or the head office, as the case may be, in Form EXP1 appended to this notification, before availing the said exemption;

(ii) Is registered with an export promotion council sponsored by the Ministry of Commerce or the Ministry of Textiles, as the case may be.

(iii) Is a holder of Import-Export Code Number;

(iv) Is registered under section 69 of the said Act”

(v) Is liable to pay service tax under sub-section (2) of section 68 of the said Act, read with item(B) of sub-clause (i) of clause (d) of sub-rule (1) of rule 2 of the Service Tax Rules, 1994, for the specified service;

(b) The invoice, bill or challan, or any other document by whatever name called issued by the service provider to the exporter, on which the exporter intends to avail exemption, shall be issued in the name of the exporter, showing that the exporter is liable to pay the service tax in terms of item(v) of clause (a);

(c) The exporter availing the exemption shall file the return in Form EXP2, every six months of the financial year, within fifteen days of the completion of the said six months”.

4. The appellant regularly exports their products. Vide show cause notice dated 16/01/2014, appellant was required a show cause notice as to why service tax amounting to Rs. 1,37,514/- should not be demanded and recovered, alleging that the appellant have filed form EXP-2 with the Department on 8^th November, 2013 for the period April, 2013 to September, 2013 whereas they were required to file for EXP-2 by 15^th October, 2013. Thus, the appellant have not fulfilled the condition of the said notification and therefore the exemption claimed by the appellant is not available to them and they are liable to pay service tax equal to the amount which they have availed exemption during the said period.

5. The said show cause notice was adjudicated on contest, and the proposed demand confirmed along with penalty under Section 76 of the Being aggrieved the appellant preferred appeal before Commissioner (Appeals) who vide impugned order rejected the appeal observing that since the appellant have not fulfilled specified conditions in the notification, the benefit of exemption for the period April,13 to September, 13 is not admissible to them.

6. Being aggrieved the appellant is before this Tribunal. The Ld. Counsel states that it is admitted fact that they have filed the requisite declaration EXP-2 on 08^th November,2013, before the issue of Show Cause Notice to 16^th January, 2014. There is a delay of about 22 days in filing this declaration. It is not disputed that the appellant have exported the consignments and the appellant have filed with the Department along with the Form EXP-2, the requisite evidence of export and the services availed from the GTA, as is evident from the table A & B annexed to the said form EXP-2, the copy of which is available on record. The Ld. Counsel further states that there is no stipulation in the said notification, if declaration is filed with delay, the same is not condonable. Further the said requirement is directory in nature and the main purpose-export is fulfilled. The said delay was condonable and the benefit of exemption should not have been denied. The Counsel further relies on the ruling of P&H High Court in CST V/s Convergys India Pvt. Ltd. wherein question before the High Court was whether the finding of the Tribunal that non observance of procedural condition(s) of a technical nature cannot be used to deny the substantive concessions, is not wrong and perverse, whereas the filing of declaration prior to export of services as envisaged in the para 2 of Notification No. 12/5-ST, is mandatory and there is no provision for condoning the delay in filing the declaration. The Hon’ble High Court placing reliance on the ruling of the Hon’ble Supreme Court in Manglaore Chemicals and Fertilizers v/s Deputy Commissioner 1991 (55) 437, held that the procedural requirement could be condoned for valid reasons particularly when the rebate extended was a new benefit. It was held that the delay of few days was condonable, further observing that filing of declaration in the circumstances cannot be held to be mandatory.

7. The Ld. AR for Revenue supports the impugned order and further points out from para 3 of the show cause notice that the appellant have neither filed Form EXP-1 (which is required before export) nor EXP-2 ( which is required to file after export for every six months), in time. Accordingly exemption has been rightly denied.

8. Having considered the rival contentions I find from perusal of Form EXP-1 that it is in the nature of general declaration containing the name of exporter, registration number, STC No, Jurisdiction detail of the ST, Membership number of export council, name of the export council, address of the registered office, telephone number, IEC code, details of bank account, and the declaration that the exporter shall comply with conditions laid down in the said notification and in case of any change in the aforementioned particulars, shall intimate the same to Revenue. On filing the declaration the Assistant Deputy Commissioner in required to enter the same in a register maintained giving the acknowledgment number and the date of receipt. From the perusal of the form EXP-I, find that it is not required to be given with each consignment, as the form does not contain the details of the particular consignment. Thus, I hold that once form EXP­1 is filed it is valid till there is variation in the case of the exporter, of the details contained therein. Accordingly I hold that for admitted delay of about 22 days in filing form EXP-2 the benefit of exemption from service tax for admitted export of goods, cannot be denied. Accordingly I set aside the impugned order. The appeal is allowed with consequential benefits, if any.

(Order Dictated & pronounced in the open court)