2023 (1) TMI 601 - HC - Customs

Denial of rightful claim of refund of service tax being the Petitioner is an exporter coming under the Customs Act on the ground of hyper technicality when export have taken place actually - denial of statutory right of the Petitioner for mere procedural lapse - denial of just claim of the Petitioner in deviation of doctrine of precedent which is a fundamental constraint on judicial decision-making. HELD THAT - Under Section 2(20) of Customs Act the term exporter would include any owner or any person holding himself out to be the exporter. In other words the person holding out to be the exporter (in this case M/s. Liberty and M/s. RIPL) need not be the exporter. It could well include an entity like the present Assessee which in fact entered into the agreement pursuant to which the export took place. Added to this fact is the finding of the Commissioner (Appeals) that for the limited purposes of facilitating the export separate agreements were entered into by the Appellant with M/s. Liberty and M/s. RIPL whose limited role was to file the shipping bills for the purposes of export in their names. It has been being factually further found by the Commissioner (Appeals) that the entire cost of effecting the export was borne by the Appellant. It ran the risk of penalties if the goods were not exported or if there was delay in export or the goods were below the specifications. Importantly the LC had been opened with the Bank by the Appellant . The invoices of sale of goods was raised by the Appellant-Assessee on the buyers and it is the Assessee which had remittances in its own name pursuant to the exports made. All the above factors go to show that it was in fact the Assessee which was the real exporter of the goods for the purpose of Section 2(20) of the Act - the Court is unable to concur with the view of the Tribunal that in the present case the Assessee was not entitled to the refunds since it was not the exporter. The questions framed are answered in favour of the Assessee and against the Department.

Summary

Issues:
Appeal against CESTAT's order allowing Excise Appeal No.471 of 2012, Refund claim of service tax for export of Iron Ore Fines, Interpretation of 'exporter' under Customs Act.

Analysis:
1. The appeal was filed against CESTAT's order setting aside the Commissioner (Appeals) order in favor of the Assessee regarding the refund claims for service tax paid on the export of Iron Ore Fines. The questions framed for consideration included whether the Tribunal was justified in denying the rightful claim of refund based on technicality, ignoring precedent, and denying statutory rights for procedural lapses.

2. The background revealed that the Assessee filed refund claims for service tax paid on exports through Paradeep Port. The Commissioner (Appeals) found that the Assessee was the actual exporter despite the shipping bills being in the name of other entities. The Assessee bore all export-related expenses, entered agreements with foreign buyers, raised invoices, and received remittances, establishing its role as the real exporter.

3. The CESTAT, however, held that entities named in shipping bills were the exporters based on Customs Act definitions. The Court analyzed the Act's definitions of 'entry,' 'export goods,' and 'exporter,' noting the inclusive nature of the term 'exporter' to include any person holding out to be the exporter, not necessarily the actual exporter.

4. Considering the facts that the Assessee bore all export costs, entered agreements for exports, and managed export-related activities, the Court concluded that the Assessee qualified as the exporter under the Act. The Tribunal's view denying the Assessee's entitlement to refunds was disagreed with, and the Commissioner (Appeals) order was restored in favor of the Assessee.

5. Consequently, the Court answered the framed questions in favor of the Assessee, setting aside the Tribunal's order and directing the Department to refund the claimed amounts within eight weeks. The appeal was disposed of in favor of the Assessee, emphasizing the Assessee's rightful claim as the exporter for the purpose of refund entitlement under the Customs Act.