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M/s Shree Rajasthan Syntex Ltd. Versus CCE, Jaipur

2016 (7) TMI 1152 - CESTAT NEW DELHI

Claim of refund - services used for export of goods - Notification No. 41/2007-ST dated 6.10.2007 - Refund was rejected on the ground that the appellant had availed drawback in respect of goods exported under Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 - Held that:- the analysis and conclusion drawn on this issue in terms of para 2 (reproduced above) of the judgement of CESTAT in the case of Bharat Art and Crafts [2016 (4) TMI 197 - CESTAT NEW DELHI] remain valid and ther .....

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ghvi, Advocate for the appellant Shri Yogesh Agarwal, D.R. for the respondent ORDER Per R. K. Singh Appeal has been filed against order-in-appeal dated 3.11.2009 which upheld the order-in-original dated 31.3.2009 in terms of which the refund claim amounting to ₹ 11,18,403/- filed by the appellant in terms of Notification No. 41/2007-ST dated 6.10.2007 was rejected on the ground that the appellant had availed drawback in respect of goods exported under Customs, Central Excise Duties and Ser .....

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of services received were not covered under the scope of specified services under the said notification. S. No. Description Amount of refund involved 1. Terminal handling charges 52,170/- 2. Charges for transportation of empty containers from port to the factory 76,347/- 3. Charges recovered by Customs House Agent 30,883/- Total 1,59,400/- (ii) The refund relating to terminal handling charges has been allowed by CESTAT in terms of the following judgements: (i) SRF Limited Vs. Commissioner 2015 .....

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ing agency charges, buffer yard charges, private movement charges, documentation charges etc. The CHA charged and recovered service tax on the agency charges of which refund was claimed by the appellant. However, the impugned proceedings rejected the refund claim on the ground that the buffer yard charges, private movement charges, documentation charges (for short other charges ) are not covered under CHA services. The understanding of the Commissioner (Appeals) is factually incorrect as the ref .....

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ision of the Hon ble Tribunal in Commissioner Vs. Spentex Industries Ltd. 2014 (35) STR 562 (Tri.-Mum). (v) As regards the rejection of the refund claim on the ground that the exports were made under claim of drawback and thereby violated Condition No. 1(e) of the Notification No. 41/2007-ST; the Drawback Rules provide for drawback in the form of rebate of tax paid on taxable services used as input services in manufacture of export goods as per Rule 2(a) of the Drawback Rules. (vi) Only with eff .....

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input services in the manufacturing or processing of export goods in terms of Rule 3(2)(ea) of Drawback Rules. It also cited Section 93A read with Section 94(2)(hh) of the Finance Act, 1994 which empowers the Central Government to grant rebate and frame rules to provide for rebate of service tax paid or payable on the taxable services used as input services in the manufacturing or processing of goods exported out of India. (viii) That the condition No. (e) was omitted from the notification vide .....

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ation thereto has been allowed by judgements of CESTAT in the case of SRF Ltd. (supra). Similarly, the issue of refund in respect of service tax paid in respect of transportation of empty containers from port to the factory has been analysed and such refund allowed by CESTAT in the case of Vippy Industries (supra). We find that with regard to CHA charges the appellant has clearly mentioned that the CHA has not charged and the appellant has not claimed any refund of service tax on other charges a .....

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Service Tax Drawback Rules, 1995 . This issue came up for consideration of CESTAT in the case of Bharat Art and Crafts (supra) in which CESTAT analysed an issue and observed as under : 2. As regards the appeals of M/s Bharat Arts & Crafts and M/s Bothra International are concerned, ld. Consultant for the appellant concedes that they exported goods under claim of drawback under Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 but contended that drawback did not include the .....

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ods from the factory. In this regard, it is useful to reproduce below the provision of the said Rule. Rule 3(2)(ea): In determining the amount or rate of drawback under this Rule, the Central Govt. shall have regard to the average amount of tax paid on taxable services which are used as input services for the manufacturing or processing or for containing or packing the export goods. It is evident from the above quoted Rule that it merely makes it mandatory for the Central Government to have rega .....

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ling drawback of service tax paid on the specified services under the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 . There is no doubt that the impugned services were input services. If the contention of the appellant that these services were not included in fixing the all industry rates of drawback was true then there was no need to incorporate the said proviso in Notification No. 41/2007-ST as the said proviso would in that case be redundant. There is natural presumption .....

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ck, the impugned refund claims would not be admissible by virtue of proviso (e) to Notification No. 41/2007-ST. It has been so held by CESTAT also in the case of Rajasthan Textile Mills Vs. CCE, Jaipur 2015 (37) STR 410 (Tri.-Del.) = 2014-TIOL-1544-CESTAT-DEL. CBEC circular dated 13.7.2006 (supra) issued in the wake of insertion of Rule 3(2)(ea) in the Drawback Rules does in no way alter the legal position analysed in the above reproduced para; indeed CBEC circular cannot change the legal positi .....

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1/2007-ST) which is operationalised by way of refund. The said notification does not have any relation to Section 93A nor was it issued in terms of the said section. Similarly Section 94 deals with the rule making power of the Central Government. Reference has also been made to Section 94(2)(hh) to contend that it restricts the power of the Central Government to frame rules to provide for rebate of service tax paid or payable on the taxable services used as input service in manufacturing or proc .....

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