At, Customs Excise Service Tax Appellate Tribunal Regional Bench, Hyderabad
By, THE HONORABLE JUSTICE: M.V. RAVINDRAN
For Petitioner: B.V. Siva Naga Kumari, A.R And For Respondents: Venkat Prasad, Advocate.
1. This appeal is filed by the Revenue against Order-in-appeal No. 07/2011(D) CE dated 02/08/2011.
2. Heard both sides and perused the records.
3. The issue that falls for consideration in this appeal is regarding refund of service tax paid on various input services which are utilised for iron ore mining and subsequent export of the said iron ore. The adjudicating authority sanctioned the refund claims filed by the respondent of the service tax credit
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lying in balance in the CENVAT account under Rule 5 of the CENVAT Credit Rules 2004; aggrieved by such an order, Revenue preferred an appeal before the 1st Appellate Authority. The 1st Appellate Authority also has held that the respondent is eligible for refund of the amount of service tax paid on various services. Revenue in the grounds of appeal is arguing that respondent could not have availed CENVAT credit of the service tax paid on various services as iron ore is exempted from payment of duty. It is the case of the Revenue that when the CENVAT credit itself is not available, the question of availing the same and claiming refund under Rule 5 does not arise.
4. Learned Commissioner (A.R.) also submits that as per Rule 6(5) read with explanation 1 to the Rule and Rule 6(2), no refund is due and that the documents on which CENVAT credit was availed were incomplete documents and debit notes are not the documents eligible for availment of CENVAT credit. On a specific query from the Bench learned Commissioner again submits that the goods which are cleared for export could not have been cleared under bond or LUT as per Notification No. 24/2010 CE (NT) dated 26.07.2010 and produces a copy of the same.
5. Learned counsel submits that the issue is now settled by various decisions of the Tribunal and a decision of this Bench in the case of HTS Agro Tech Industries v. CCE Hyderabad [2017-TIOL-294-CESTAT-Hyd). He submits that respondent being 100% EOU, accumulated CENVAT credit refund of which cannot be rejected on the ground that exported of final goods attracted NIL rate of duty. He submits that the same view have been expressed by the Division Bench in the case of Aravind Ltd. v. CCE Ahmedabad : 2016(334)ELT 146 (Tri-Ahmd). As regards Notification No. 24/2010, it is his submission that the said Notification excludes the operation of Rule 19 of Central Excise Rules 2002, for 100% EOU.
6. On a careful consideration of the submissions made, I find that the concurrent factual finding of both the lower authorities are correct, inasmuch, these services i.e. mining services, security services, cargo handling services, transportation services, supply of tangible goods services are utilised in excavation of iron ore which is exported. The Respondent herein had filed/submitted all the documents which were verified by the adjudicating authority. In the impugned order, the 1st Appellate Authority has also come to the same conclusion and as regards the minor objections raised, the 1st Appellate Authority has held that the documents indicated all the required particulars for availment of CENVAT credit. I find that the concurrent findings as recorded by both the lower authorities seems to be in consonance with the law as it is the avowed policy of Govt. of India that the exports should not be burdened with taxes, specifically when there is no dispute as to the services rendered and utilised for the exported consignments, non-sanctioning of the refund claims of the service tax paid would add to the value of export consignments. Looking from this angle, the impugned order as well as the order of the adjudicating authority for sanction of the refund seems to be correct. On perusal of Notification No. 24/2010 CE (NT), I do find that the said Notification clearly lays down that exempted excisable goods which are chargeable to NIL rate of duty cannot be cleared by executing a Bond or LUT, as it excludes the goods manufactured and cleared by 100% EOU.
7. Learned Commissioner A.R. submits that the CENVAT credit availed on debit notes is incorrect as Rue 4A of Service Tax Rules 2002 does not permit to do so. I find that the provisions of Service Tax Rules is regarding issuance of debit notes, while provisions of CENVAT Credit Rules 2004 more specifically Rule 9(2) indicates that CENVAT credit can be availed on any document which has all the particulars, subject to the satisfaction of the Assistant Commissioner/Dy. Commissioner. The sanction of the refund claim by the adjudicating authority in this case, is itself an acceptance of the fact that these documents are eligible for availment of CENVAT credit.
8. In view of the foregoing, the impugned order is upheld and the appeal is rejected.
(Order pronounced and dictated in open court.