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2024 (10) TMI 1263 - AT - CustomsRefund claim under N/N. 41/2012-ST dated 29.6.2012 - rejection for non-compliance of procedures / conditions stipulated in Notification No. 52/2011-ST dated 30.12.2011 - appellant has stated that they had claimed a refund of Service Tax based on actuals and upon production of connected documents as per paragraph 3 of Notification 41/2012 dated 29.06.12 by filing a refund application before their range / division Excise Officials. HELD THAT - It is seen that the appellant is neither registered with the Central Excise Department nor has he registered his service tax code number and bank account number with the customs. He has also not made a declaration in the Shipping Bill while presenting the same to the proper officer of customs. Hence no verification could possibly have been done by the department. The said conditions are the essence or substance of the notification granting exemption. It helps the department in ensuring that the exemption is granted to an eligible exporter who fulfills its conditions and the facility is not abused. Hence these procedural violations would cause serious prejudice to revenue if refund is to be granted. While it is true that Government does not seek to burden the exporter with taxes, those who want to get the benefit of a notification benefit extended to them shall have to satisfy the provisions of the notification, so that no misuse of the same is made. The issue stated in the impugned order for rejection of the claim are not flimsy or mere technicalities. The Hon ble Supreme Court in Commissioner of Central Excise, Chandigarh I Vs Mahaan Dairies 2004 (2) TMI 73 - SUPREME COURT , stated that, It is settled law that in order to claim benefit of a Notification a party must strictly comply with the terms of the Notification. If on wordings of the Notification the benefit is not available then by stretching the words of the Notification or by adding words to the Notification benefit cannot be conferred. The he lower authority has taken a view which is reasonable, legal and proper - appeal dismissed.
Issues Involved:
1. Eligibility for refund under Notification No. 41/2012-ST. 2. Compliance with procedural requirements under Notification No. 52/2011-ST. 3. Jurisdiction of CESTAT to hear the appeal. 4. Interpretation and application of exemption notifications. Detailed Analysis: 1. Eligibility for Refund under Notification No. 41/2012-ST: The appellant filed a refund claim under Notification No. 41/2012-ST, which became effective on 01/07/2012. The department rejected the claim, arguing that the shipping bill date was prior to the notification's effective date and that the appellant did not follow the mandatory procedures outlined in the notification. The appellant contended that they were unable to assess the quantum or value of services at the time of filing the shipping bill and claimed the refund based on actuals with the necessary documents. The appellant argued that any procedural lapses were unintended and should be viewed as technical lapses. 2. Compliance with Procedural Requirements under Notification No. 52/2011-ST: The adjudicating authority rejected the refund claims for non-compliance with the procedures/conditions stipulated in Notification No. 52/2011-ST. The notification exempts specified taxable services used for the export of goods from service tax, subject to conditions. The appellant did not register with the Central Excise Department, nor did they register their service tax code number and bank account with customs. These procedural requirements are essential to ensure that exemptions are granted to eligible exporters and prevent abuse of the facility. The appellant's failure to comply with these requirements was deemed a significant procedural violation, affecting the essence of the notification. 3. Jurisdiction of CESTAT to Hear the Appeal: The issue of jurisdiction arose due to the appellant's reference to their claim as a 'rebate' or 'duty drawback.' Normally, appeals against the Commissioner (Appeals) lie before CESTAT, except in cases involving payment of drawback or rebate of duty of excise, which fall under the jurisdiction of the Joint Secretary (Revision Application). However, the refund of tax paid on services in this case emanates from a notification under the Finance Act, 1994, not from situations covered by the Central Excise Act or the Customs Act. Therefore, the appeal against the Commissioner (Appeals) order falls within the jurisdiction of CESTAT. 4. Interpretation and Application of Exemption Notifications: The notification in question provides two methods of claiming duty exemption: based on specified rates or documents. The appellant claimed exemption based on documents as per paragraph 3 of the notification. The exemption is provided by way of refund of service tax paid on specified services used for export. The appellant's failure to comply with the procedural requirements, such as registration and declaration in the shipping bill, was a significant lapse. Exemption notifications require strict compliance with conditions, and any non-compliance affects the eligibility for exemption. The appellant cited case laws to argue against the rejection of their claim on technical grounds. However, the court emphasized that exemptions are exceptions to the general rule and must be strictly construed. The appellant failed to establish compliance with the notification's conditions, and the rejection of their claim was deemed reasonable and proper. Conclusion: The appeal was rejected as the appellant did not comply with the procedural requirements of the notification, and the CESTAT had jurisdiction to hear the appeal. The court upheld the lower authority's decision, emphasizing the need for strict compliance with exemption notifications.
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