2024 (11) TMI 1128 - AT - Central Excise

100% EOU - Refund/rebate of service tax paid - place of removal - export of goods as per N/N. 41/2012-ST dated 29.6.2012 - refund claims were rejected on the common ground that the gamma sterilization service was undertaken much before the time of export and hence does not fall under the category of services that have been used beyond the place of removal for the export of the said goods mentioned under Explanation (A) (i) of Notification No.42/2012-ST dated 29.06.2012 - HELD THAT - The amendment has widened the ambit of the term 'specified service'. The appellant has drawn attention to the Tribunal judgment in the case of M/S BHARAT MINES MINERALS VERSUS COMMISSIONER CENTRAL GOODS SERVICE TAX, DEHRADUN. 2020 (2) TMI 1007 - CESTAT NEW DELHI which held that rebate of service tax paid on Chartered Accountant Service is to be allowed since the said service was admittedly used beyond the place of factory and further held that the wordings of the notification make it very clear that the question of the service being rendered pre or post export has no significance. Swatch Bharat Cess and Krishi Kalyan Cess - HELD THAT - This issue stands settled by the Hon'ble CESTAT, Kolkata in the case of M/S. MMTC LIMITED VERSUS COMMISSIONER OF CGST CX, BHUBANESWAR COMMISSIONERATE 2023 (10) TMI 815 - CESTAT KOLKATA wherein it has been held that the assessee is entitled for refund of Swatch Bharat Cess and Krishi Kalyan Cess in terms of notification No. 41/2012-ST dated 29.06.2012. Refund paid on courier services - HELD THAT - The Commissioner (Appeals) had allowed this very issue in the appellant s own case M/S. KANAM LATEX INDUSTRIES PVT. LTD. VERSUS COMMISSIONER OF GST CENTRAL EXCISE, TIRUNELVELI 2024 (1) TMI 1055 - CESTAT CHENNAI . The Department has accepted the said order-in-appeal and no further appeal has been filed before the Tribunal against the grant of refund of service tax paid on courier services. It is submitted that the appropriation of an amount of Rs. 1,24,593/- is clearly without authority of law and therefore they are entitled to the refund of the said amount wrongly appropriated. In the facts and circumstances stated, the appropriation of amounts made and covered by the above-mentioned appeals, are set aside. The impugned order set aside - appeal allowed.

Summary

Issues Involved:

1. Eligibility of refund/rebate for Gamma Sterilization Service.
2. Requirement of evidence for receipt of foreign exchange for exported goods.
3. Filing of refund claims in improper format.
4. Refund eligibility for Swachh Bharat Cess and Krishi Kalyan Cess.
5. Appropriation of amounts by the adjudicating authority.

Issue-wise Detailed Analysis:

1. Eligibility of Refund/Rebate for Gamma Sterilization Service:

The primary issue revolves around the rejection of refund claims for service tax paid on Gamma Sterilization Service, which was used before the export of goods. The Department contended that this service was not eligible for rebate under Notification No. 41/2012-ST dated 29.06.2012, as it was used before the goods were removed from the factory. However, the appellant argued that the notification was amended by Notification No. 1/2016-ST dated 03.02.2016, which expanded the definition of 'specified services' to include services used beyond the factory or any other place of production for export. The Tribunal found that the amendment supported the appellant's claim, as the sterilization was indeed beyond the place of removal, and the goods were exported. Therefore, the refund could not be denied on this basis.

2. Requirement of Evidence for Receipt of Foreign Exchange:

In certain appeals (ST/40846 & ST/40847/2016), the refund claims were also rejected due to the lack of evidence for receipt of foreign exchange for goods exported via courier. The Tribunal did not specifically address this issue in detail, but the implication is that such procedural requirements should not obstruct the substantive right to refund if the primary conditions of the notification are met.

3. Filing of Refund Claims in Improper Format:

The rejection of refund claims for being filed in an improper format was contested by the appellant, citing precedents that procedural lapses should not lead to denial of substantive rights. The Tribunal agreed, referencing the Apex Court's stance that procedural laws are meant to facilitate justice rather than obstruct it. Therefore, the Tribunal found that the claims should not be rejected solely due to format issues if they were subsequently corrected.

4. Refund Eligibility for Swachh Bharat Cess and Krishi Kalyan Cess:

The Tribunal addressed the issue of refund eligibility for Swachh Bharat Cess and Krishi Kalyan Cess, referencing a decision by the CESTAT, Kolkata, which held that these cesses are refundable under Notification No. 41/2012-ST. Therefore, the Tribunal concluded that the appellant was entitled to refunds for these cesses as well.

5. Appropriation of Amounts by the Adjudicating Authority:

The appellant contested the appropriation of certain amounts by the original authority, arguing that these appropriations were made despite an ongoing appeal against the related order. The Tribunal acknowledged that the appeal had been decided in favor of the appellant, rendering the appropriation without legal basis. Consequently, the Tribunal set aside the appropriations and directed refunds of the amounts wrongly appropriated.

Conclusion:

The Tribunal set aside the impugned orders and allowed the appeals, granting consequential relief as per law. The judgment emphasized the importance of substantive justice over procedural technicalities, ensuring that the appellant's rights to refunds were upheld in accordance with the amended notification and relevant legal precedents.