2022 (4) TMI 734 - AT - Service Tax

Refund claim - the two numbers of export invoices against single shipping bill has been submitted by the claimant, but the invoice details as given in the shipping bill do not match - violation of provision of Para (1) of the said Notification No.41/2012-ST dated 29.06.2012 - HELD THAT - The export was made through M/s MMTC Ltd. which was the statutory provision in the Trade Policy, Schedule-II SL. 80 and the money be realized after the export of the goods. The service tax paid in terms of the services utilized in the export of goods to be claimed as Refund. It is also found that the Role of M/s MMTC Ltd. as intermediary is only because of the restriction imposed in the Foreign Trade Policy schedule-II, SL. 80 which states that the Manganese Ore to be exported through MMTC Ltd. The restriction imposed in respect of Manganese ore is governed by the Section 3 of the Import and Export (Control) Act, 1947. It is apparent that the Appellant submitted invoices on which certification has been done in terms of para 3(k) of the said notification regarding co-relation and nexus between input services and exports made for the said period of claim for refund as well as payment of Service Tax made by them - all the exports as mentioned above are Third party Exports have been made through Visakhapatnam Port through MMTC Limited as per the export policy of canalized items. It is apparent that M/s MMTC Ltd. stands indemnified that export to be made through them and M/s S. K. Sarawagi Co. Pvt. Ltd. (the Appellant herein), is the owner of the goods, is not allowed to export directly under Section 2 (20) of the Customs Act, 1962 as well as under the definition of exporter in the Foreign Trade Policy, 2009-14 under Chapter 9.26 - the role of M/s MMTC Ltd. in the export of Manganese Ore, is a compulsion to be observed by the Appellant and it is not by choice which has led to the present dispute - the Appellant declared that no CENVAT Credit of service tax paid on the specified service used for export of said goods has been taken under CENVAT Credit Rules, 2004. That the appellant have submitted the invoices issued in the name of the exporter duly certified as prescribed in the said notification in terms of Para 3 (j) (k) of the said Notification. The impugned order is set aside - Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Eligibility of the appellant for a refund claim under Notification No. 41/2012-ST dated 29.06.2012.
2. Determination of the appellant as an exporter under the Customs Act, 1962 and Foreign Trade Policy.
3. Validity of the rejection of the refund claim by the lower authorities.

Issue-wise Detailed Analysis:

1. Eligibility of the Appellant for a Refund Claim under Notification No. 41/2012-ST dated 29.06.2012:
The appellant filed a refund claim for ?2,09,671/- under Notification No. 41/2012-ST dated 29.06.2012. The claim was rejected on the grounds that the submitted Shipping Bill and Bill of Lading were in the name of MMTC Ltd., not the appellant, and the BRC was also in MMTC's name. The authorities argued that this discrepancy violated the provisions of the notification, leading to the claim being deemed inadmissible.

The appellant contended that the title of the goods passed to MMTC only after loading onto the vessel, and the services rendered for loading were the appellant's responsibility. The appellant provided evidence of a link between the goods exported and the sale of goods through MMTC, asserting that all conditions under the notification were met.

2. Determination of the Appellant as an Exporter under the Customs Act, 1962 and Foreign Trade Policy:
The authorities argued that the appellant did not qualify as an exporter under Section 2(20) of the Customs Act, 1962, which defines an exporter as any owner or person holding himself out to be the exporter between the entry for export and the time of export. The appellant, however, claimed to be the owner of the Manganese Ore and responsible for the goods until they were loaded onto the vessel, thus qualifying as an exporter.

The tribunal found that the appellant satisfied the definition of an exporter under both the Customs Act and the Foreign Trade Policy. The tribunal noted that the role of MMTC Ltd. was that of an intermediary due to restrictions in the Foreign Trade Policy, which mandated that Manganese Ore be exported through MMTC Ltd.

3. Validity of the Rejection of the Refund Claim by the Lower Authorities:
The tribunal reviewed the detailed discussion by the Commissioner (Appeals), who upheld the rejection of the refund claim. The appellant argued that they had complied with all necessary conditions, including providing certified invoices and proving the correlation between input services and exports.

The tribunal observed that the appellant had provided sufficient evidence to establish their claim, including contracts showing the appellant's responsibility for the goods and services until export. The tribunal also noted that the appellant had declared no CENVAT Credit of service tax paid on the specified services used for export, as required.

Conclusion:
The tribunal concluded that the appellant met all conditions under Notification No. 41/2012-ST dated 29.06.2012 and qualified as an exporter under the Customs Act and Foreign Trade Policy. The rejection of the refund claim was found to be erroneous. Consequently, the tribunal set aside the impugned order and allowed the appeal with consequential benefits to the appellant.