9911796707
TMI Blog2024 (7) TMI 554X X X X Extracts X X X X X X X X Extracts X X X X ..... .06.2012 issued under Section 93A of the Finance Act, 1994 was issued. The export incentives under the Central Excise Act particularly Rules 18 and 19 of the Central Excise Rules, 2002 read with relevant Notifications and Rule 5 of the CESTAT Credit Rules, 2002 as also under Notification No.41/12-ST dated 29.06.2012 issued under Notification No.41/12-ST, dated 29.06.2012 issued under Section 93A of the Finance Act, 1994 are intended to incentivise legitimate exports. The idea of the incentivising such exports is to encourage such exporters, who compete in the international market and bring precious foreign exchange for the country, which enhances the foreign exchange reserves of the country and stabilizes the Government's position quay balance of payments. Unless the exports are legitimate, the question of incentivising such exports would not and could not subserve public purpose. The public purpose in Section 93A of the Act would mean those exports which are legitimate and are within the four-corners of the law. Proceeds of crime and proceeds of illegal exports would not enure in favour of the petitioner in the form of rebate/albit refund of service tax borne on services used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stries (MMD) Department, dated 08.08.2013. 6. The petitioner had exported the garnets between October 2015-December 2015 and October 2016-December 2016 and had filed rebate claims under Notification No.41/12-ST, dated 29.06.2012 issued under Section 93A of the Finance Act, 1994. 7. Text of Notification No.41/12-ST, dated 29.06.2012 issued under Section 93A of the Finance Act, 1994 reads as under: Notification- Service Tax-Service Tax TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (1) Government of India Ministry of Finance (Department of Revenue) NOTIFICATION NO 41/2012-ST, Dated: June 29, 2012 In exercise of the powers conferred by section 93A of the Finance Act. 1994(32 of 1994) (hereinafter referred to as the said Act) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) number 52/2011-Service Tax, dated the 30th December, 2011, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 945(E), dated the 30th December, 2011, except as respects things done or omitted to be done before such supersession, the Central Government, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... represented by its Proprietor, M.Ramesh, which sold the same to the petitioner Company of which the said Proprietar was the Director, ipso facto would not Come under legitimate grant of rebate in the form of export incentive in Notification No.41/12-ST dated 29.06.2012. 12. The learned counsel for the petitioner would submit that even if there was illegal mining and export of the products, it was open for the counterparts of respondents 2 and 3 under the Customs Act, 1962 to institute appropriate proceedings to impose penalty, in which case, the petitioner would have got the option of paying redemption fine under Section 125 of the Customs Act, 1962. 13. It is submitted that the Customs Department has not initiated any proceedings. As a matter of fact, it is submitted that the exports were made after Let Export Orders were issued for export of the garnets. 14. That apart, the learned counsel for the petitioner would submit that the Notification is silent as to the source of the material. It is submitted that as long as there are exports made, the export incentive in the form of rebate, ie., refund of service tax borne on input services used in the export of goods, whether manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 5. Prior to October 2015, the claims for Rebate filed by the Petitioner were positively processed and rebate/refund of Service tax paid were sanctioned to the Petitioner regularly. 6. On the basis of the above District Collector's order dated 09.11.2016, following claims filed for rebate by way of refund of services tax paid on the services used in exports by the petitioner were rejected by the third respondent on the ground that the exports were illegal, since the exported goods were emanated from illicit mining of Garnet sands as per the District Level Committee Report above. 1 Oct 2015 to Dec 2015 404170 Rejected 25/2017 11.05.17 2 Jan 2016 to March 2016 623379 Rejected 27/2017 11.05.17 3 Aprial 2016 to June 2016 622060 Rejected 27/2017 11.05.17 4 Jul 2016 to Sep 2016 636518 Rejected 06/2019 21.02.2019 5 Oct 2016 to Dec 2016 394131 Rejected 07/2019 28.02.2019 7. Aggrieved, the Petitioner had filed appeal with the Commissioner of Central Excise (Appeals), Madurai in respect of all the above claims. However, the commissioner (appeals) vide his orders -in - Appeal detailed below rejected the petitioner's appeal and upheld the orders of the Original Authority. S.No Period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmits that the entire impugned order is mainly on the ban imposed by the State Government towards mining of minerals in beach sand while rejecting the rebate claim. 15. It is humbly submitted that the learned authority misdirected himself by placing reliance on the G.O. issued by the Tamilnadu Government towards mining operation. However, the present rebate claim is not on goods but on services utilized towards exporting of goods. 16. It is pertinent to state that the customs department has not initiated any proceedings towards the export of goods. Further, the department has processed the shipping bill under sec.50 of the Customs Act 1962, the let export order were endorsed by the proper officer under sec.51 of the Customs At 1962. The export proceeds by way of foreign exchange were received through proper banking channels as prescribed by the Reserve Bank of India and the banks are issued bank realization certificates. Therefore, the impugned order has not considered all these points while rejecting the rebate claim 17. The petitioner submits the present issue is considered by the Hon ble CESTAT in the case of a. Transworld Garnet Pvt. Ltd vs. Commr. of GST Central Excise (the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... smissed, as the petitioner has wrongly approached the wrong forum and has invited an adverse order against itself. 21. That apart, it is submitted that the beach sand was illegality excavated by Manickam Minerals, a proprietary concerned, who is owned by none other than the Managing Director of the petitioner and therefore, the facade of Company cannot be used to violate law to take advantage of the decision of the Tribunal in V.V.Minerals Vs. Commissioner of GST and Central Excise, Madurai reported in 2022 (56) G.S.T.L. 167 (Tri.Chennai) 22. That apart, even though the petitioner has stated that the petitioner has also procured the beach sand from Indian Rare Earths Limited, the fact of the matter is that the finding of the Original Authority as affirmed by the Appellate Authority indicates that the exports in question were out of illegally mined beach sand supplied by the proprietary concerned of the Director of the petitioner viz., Manickam Minerals during the period in dispute. 23. A reference was made to para 2.1 to para 5 of the Order in Original No. 25/2017(ST)(REF) dated 11.05.2017 bearing Ref.C.No.IV/10/69/2016-STU, which reads as under: 2.1 In the meanwhile, the District ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de G.O.(MS) No.156 dated 08.08.2013 and G.O.(MS) No.173 dated 17.09.2013. By the Public Notice, the Commissioner has directed the exporters of Beach sand minerals to produce necessary certificates/ documents viz., Certificate of legally mined minerals from the concerned District Collector/ transport permits along with bulk permits, certifying the legal source of such Beach sand minerals brought to the Customs Area for export. Hence the claimants were asked vide letter even No. dated 28.02.2017 to furnish the details of export of Garnet Abrasives made from November, 2016. The claimants vide their letter dated 08.03.2017 submitted the details which shows the last date of export as 23.11.2016 (Shipping Bill date 21.11.2016) and after that no export has been made. 5. The claimants were offered a personal hearing on 03.04.2017 but vide their letter dated 12.04.2017, they requested for 15 days time on the ground of their consultant being out of station. On 09.05.2017. Shri, K. Pushparaj, Accountant of the Company appeared for Personal Hearing under authorization dated 05.05.2017 issued by the Company. He submitted that they are only traders of Garnet, Ilmenite, Zircon and Rutile; that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Since the materials exported by the petitioner were illegally transported and are covered by illegal mining operations, upon the report of the District Level Committee (DLC) of Tirunelveli District that the petitioner had illegally transported a total quantum of 7,17,768 MT of minerals extracted from the raw sands during the period of 1999-2000 to 2016-2017, a show cause notices were issued. 4. Petitioner admitted that they illegally transmitted 1,05,707 MT of minerals during the period from 2014-2015 to 2016-2017, as they did not have any transport permit. 5. The adjudicating authority issued OIO Nos.25 to 27 of 2017 dated 11.05.2017, 06/2019 dated 21.02.2019 28.02.2019. It held that no right can accrue from illicit acts. It rejected the rebate claims. 6. Petitioner filed appeals before the appellate authority in Appeal Nos.63 to 65 of 2018 dated 27.02.2018, 311 312 of 2019 dated 14.10.2019 were dismissed. 7. Aggrieved by the above-mentioned order in appeals the petitioner filed the revision applications before the revision authority under Section 35EE of the Central Excise Act, 1944. The revisionary authority vide his Common Revision Order Nos.33-39/2022-ST (SZ)/ASRA/MUMBAI dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Petitioner ought to have filed any appeal before the CESTAT but had wrongly filed revision before the revision authority under Section 35EE of the Central Excise Act, 1944. Reliance is placed on 2019 (370) E.L.T. 1690 (G.O.I.) In Re: Adobe systems 2016 (45) S.T.R. 301 (Tri. - Mumbai) Vodafone mobile services vs Commissioner of ST. Conclusion: 1. The exemption can only be granted when the government is satisfied that there is a public welfare done in the case of export and involved no illegal act or crime or any action which arises from an illegal act. 2. However, in the present case the export carried out by the petitioner is not legal as it arises from an illegal act of mining of raw sand which has been banned by the government vide GO. (MS) No. 156 dated 08.08.2012. 3. Since the petitioner is involved in the illegal export of raw sand, he cannot be made cligible for the exemption provided under the Notification and not eligible for the rebate/refund claim. 4. The petitioner could not have filed a revision before the revision authority under Section 35EE of the Central Excise Act, 1944 and ought to have filed appeal against the Order in appeals before the CESTAT. Hence this presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of the Finance Act or the notification, I am of the opinion that the rejection of refund claim cannot sustain. 6. From the above discussions, the impugned order is set aside and the appeal is allowed with consequential relief, if any 31. The above view expressed by the Tribunal in V.V.Minerals Vs. Commissioner of GST and Central Excise, Madurai reported in 2022 (56) G.S.T.L. 167 (Tri.Chennai) cannot be applied in peculiar facts of the case, as the perpetrator of crime is himself claiming incentives as an exporter in the name of the petitioner Company. 32. Both the exports and perpetrator of crime are one and the same. If the Corporate facade is lifted, it is clear that the same M.Ramesh, who is the Managing Director of the petitioner, is the proprietor of Manickam Minerals. Therefore, the export incentives are not to be given for proceeds of crime. Grant of exports incentivies which are out of the illegal activity would not be keeping in tune with the public purpose for which exemption Notification No.41/12-ST, dated 29.06.2012 issued under Section 93A of the Finance Act, 1994 was issued. 33. The export incentives under the Central Excise Act particularly Rules 18 and 19 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
