ST - Refund - Notfn. 17/2009-ST - Third party exports are permissible, however, provisions of notification require submission of proof that specified services had indeed been received by exporter claiming refund of tax paid: CESTAT
By TIOL News Service:
MUMBAI, MAY 24, 2016: THIS is a Revenue appeal.
Facts are that the respondent had claimed refund of service tax of Rs.18,93,888/- paid on value of services availed in the course of export of ‘iron ore fines' vide shipping bills dated 26 th June 2009, 3 rd July 2009 and 17 th August 2009 respectively. Respondent made this claim based on exemption notification no. 17/2009-ST dated 07.07.2009.This refund application was received in the office of the jurisdictional authority only on 26 th July 2010.
SCN was issued along with addenda for rejecting the claim.
The original authority examined each one of the grounds in the notices for rejection and did not allow the refund claim.
The Commissioner (Appeals), however, accepted the contention of the respondent that issue of corrigendum/addendum was improper in that the entire complexion of the proceedings was thereby altered after receipt of the reply to the original show cause notice. Citing the decision in Mahindra & Mahindra Limited - 2006-TIOL-364-CESTAT-MUM he set aside the order and directed the original authority to re-adjudicate by limiting it to the contents of original SCNdated 7 th February 2011.
It is against this order that the Revenue is in appeal before the CESTAT.
It is contended that the decisions relied upon by the Commissioner (A) were inappropriate inasmuch as the Tribunal in Best & Co - 2008-TIOL-2043-CESTAT-DEL did accord its approval to issue of addendum/corrigendum provided that principles of natural justice are observed. It is submitted that notices were issued and opportunities afforded to the applicant to present their case before the original authority. The decision in TCTerrytex Ltd - 2015-TIOL-1345-CESTAT-DEL is also relied upon to justify the rejection of the refund.
The Bench, after considering the submissions, observed -
“7. …There is no doubt that the competent authority had resorted to piecemeal objections. However, that does not alter the facts and circumstances relating to the application for refund. Before the first appellate authority, the respondent has not contested the findings of the original authority that the claim had been filed beyond the period specified in the exemption notification in relation to the exports of 26 th June 2009 and 3 rd July 2009. Such an implicit admission and the absence of any justification for delay in applying for refund renders the ineligibility for refund beyond the question. The absence of the name of the applicant on the various documents evincing payment of tax was sought to be justified on behalf of the respondent by elaboration of practices relating to leasing of space for storage of export goods and the contention that Foreign Trade Policy allowed ‘third party' exports. Undoubtedly, third party exports are permissible and I find no reason to discount the claim that the exporter had indeed made use of the premise belonging to M/s MME Exports. However, the provisions of the relevant exemption notification require submission of proof that the specified services had indeed been received by the exporter claiming refund of the taxpaid. In the instant case, the documents evince that services were rendered to M/s MME Exports and not to the respondent herein. The restricted remand in the impugned order would lead to benefits and privileges that are beyond that recognized by law.”
Relying on the decision in Vippy Industries Ltd - 2013-TIOL-1993-CESTAT-DEL & noting that the respondent had opted not to exercise the right to counter the addendum/corrigendum despite being placed on notice, the Bench found no fault in the order of the original authority. It was also observed that the first appellate authority was not empowered to remand matters to the original authority under section 35A of the CEA, 1994.
The impugned order was set aside as lacking legality and propriety. The findings of the original authority that the applicant is not eligible for refund, owing to non-compliance with the period prescribed for making such applications and the inability of the claimant to evince utilization of eligible services, was sustained.
(See 2016-TIOL-1230-CESTAT-MUM)
