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Aztec Shiva Handicrafts and Others V/S CCE, Jaipur-II


Company & Directors' Information:- HANDICRAFTS INDIA PRIVATE LTD [Strike Off] CIN = U20290DL1956PTC002632

    S.T.A. Nos. 1161, 1183, 1186, 1187, 1188, 1189, 1206, 1284, 1425 of 2010 (Arising out of order-in-appeal No. 142, 117, 122, 159, 136, 132, 139/KKG/ST/JPR-II/10, 193 & 129/CB/ST/JPR-II dt. 04.06.2010, 02.06.2010, 03.06.2010, 02.06.2010, 04.06.2010, 05.07.2010 & dt. 12.07.2010 passed by the Commissioner (Appeals-II), Customs & Central Excise, Jaipur) and Final Order Nos. 50405-50413/2018

    Decided On, 25 January 2018

    At, Customs Excise Service Tax Appellate Tribunal New Delhi

    By, THE HONORABLE JUSTICE: DR. SATISH CHANDRA (PRESIDENT) & THE HONORABLE JUSTICE: V. PADMANABHAN
    By, MEMBER

    For Petitioner: O.P. Agarwal, C.A And For Respondents: P. Juneja and Sanjay Jain, ARs



Judgment Text


1. All these appeals are against different Orders-in-Appeal, but the issue involved is identical and hence all the appeals are considered for a decision through this common order for the sake of convenience. The appellant in all these cases exported goods and filed refund claims under Notification No. 41/2007-ST dt. 06.10.2007 for the service tax paid on various services used in the export of goods. In respect of these various appellants, part or full amounts of refunds have been disallowed for the reason that the goods have been exported under drawback claim and hence in terms of the proviso 1(e) of the Notification No. 41/2007, refund is not allowable. Aggrieved by the rejection of refunds the present appeals have been filed.

2. With the above background, we heard Sh. O.P. Agarwal, ld. Counsel for the appellant and Sh. P. Juneja & Sh. Sanjay Jain, ld. ARs for the Revenue.

3. Sh. O.P. Agarwal, ld. Counsel submitted that the refunds are allowable even though drawback has been claimed. He submitted that the condition regarding the availment of drawback stands deleted vide Notification No. 33/2008 w.e.f. 07.12.2008 and there can be no objection to grant of refund subsequent to that date. His further submission is that the amendment is of clarificatory nature and benefit should be extended even to the period prior to the amendment. He brought to our notice the decision of the Tribunal in the case of Orient Craft Limited v. CCE 2017-TIOL-2196-Tri in which the refund claim under Notification No. 41/2007 has been allowed even in respect of cases where drawback has been claimed. The order of the Single Member of the Tribunal has referred to the clarification given by Directorate of Drawback, Ministry of Finance in which it has been stated that the refund claim cannot be denied simply on the basis that the drawback has been claimed, since in terms of the Drawback Rules, it is granted only in respect of input services used in the manufacture of goods. Accordingly, ld. Counsel argued that the benefit of refund should be granted.

4. However, ld. AR for the Revenue contested such submissions. He submitted that the case law cited by the appellant is by Single Member. He also submitted that in several cases the Division Bench of the Tribunal has held that after the amendment of Notification No. 41/2007 (to include the condition that refund cannot be granted if drawback is claimed) the refunds are not allowable. He relied on the decision of the Tribunal in the case of CCE, Jaipur-I v. Rajasthan Textile Mills & Others 2016-TIOL-1228-CESTAT-DEL.

5. After hearing both sides and on perusal of record, we note that the refund claims in question cover the period partly prior to 07.12.2008 and part of the claims are for the period subsequent to the date. After the amendment of Notification No. 41/2007 by Notification No. 33/2008 , the condition regarding drawback availment has been deleted and there can be no objection to grant of such refund subsequent to that date if otherwise allowable.

6. For the period prior to such amendment by Notification No. 33/2008, the condition under Notification is very clear to the effect that the refund under the Notification cannot be paid if said goods have been exported under claim of drawback of service tax paid. After referring to the decision of the Division Bench in the case of Rajasthan Textile Mills (supra), we note that such refund claims cannot be sanctioned. The Tribunal in the case of Rajasthan Textile Mills observed as under:

"3. Both sides have agreed that an identical issue was considered by this Bench in the case of Art & Craft Inc. and others v. CCE, Jaipur-II and vide its Final Order No. 51013 - 51019/2016 dated 10.3.2016, it was held that where export has taken place under claim of drawback, condition No. (e) of Notification No. 41/2007-ST does not stand fulfilled inasmuch as the case of refund of service tax paid on various services would not be admissible to the assessees. The appellant's plea of the said condition being deleted with effect from 7.12.2008 was also considered and it was held that such deletion cannot be held to be retrospective in operation.

4. Inasmuch as the issue on the admissibility of refund in terms of Notification No. 41/2007-ST stands finally held against the appellant vide the above referred final order, we find no justifiable reason to take a different view. Further if that be so, the assessees' arguments on the nature of the services involved cannot be considered inasmuch as they are debarred from claiming refund at the threshold itself.

5. In view of the above, we allow the appeals of the Revenue and reject the appeals filed by the assessees. All the appe

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als are disposed of in above manner". 7. By following the decision of the Division Bench of the Tribunal (supra), we are of the view that refund for the period prior to the amendment by Notification No. 33/2008 cannot be sanctioned and we order so. However, the cases are remanded to the adjudicating authority for purposes of bifurcating the refund and consider the refund for the period subsequent to the date of such amendment. 8. In the light of the above, impugned orders are modified and disposed as above.
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