2017 (3) TMI 520 - AT - Service Tax

Tribunal clarifies 'place of removal' for GTA services refund on iron ore exports

M/s. Feegrade & Co. Pvt. Ltd. Versus Commissioner of Central Excise, Customs & Service Tax, BBSR-II

The Tribunal allowed M/s.Feegrade & Co. (P) Ltd.'s appeal against the rejection of their refund claim on GTA services for iron ore exports, ... Refund claim - Notification No.41/2007-ST - rejection on the ground of some shortcomings/infirmities in the refund claim - Held that: - the issue is no more res integra - C.B.E. & C. of Circular No.120/01/2010-ST dated 19.01.2010 has clarified the issue and held that The declaration should be certified by a person authorized by the Board of Directors (in the case of a limited company) or the proprietor/partner (in case of firms/partnerships) if the amount of refund claimed is less than ₹ 5 lakh in a quarter. In case the refund claim is in excess of ₹ 5 lakh, the declaration should also be certified by the Chartered Accountant who audits the annual accounts of the exporter for the purposes of Companies Act, 1956 - appeal allowed by way of remand for verification. Issues:Refund claim rejection on GTA services due to lack of specific details in lorry receipts and shipping bills. Interpretation of 'place of removal' under Notification No.41/2007-ST. Application of self-certification provision under Notification No.17/2009-S.T. for establishing correlation between input services and exports.Refund Claim Rejection on GTA Services:The case involved M/s.Feegrade & Co. (P) Ltd. appealing against the rejection of their refund claim on GTA services for export of iron ore fines. The rejection was based on the absence of specific details of exporter's invoice in lorry receipts and corresponding shipping bills, as required by Notification No.41/2007-ST. The appellant argued that due to the continuous process of goods removal and delayed export, it was not feasible to include export invoice details in lorry receipts. The Tribunal noted that the notification explicitly stated the necessity of mentioning exporter's invoice details in lorry receipts, and the lower authority's interpretation of 'place of removal' under Central Excise Act was incorrect in the context of the exemption notification. The Tribunal allowed the appeal, emphasizing that the mines qualified as the place of removal for iron ore exports.Interpretation of 'Place of Removal':The Tribunal clarified that the Notification No.41/2007-ST aimed to exempt taxable services used by exporters for goods exports, without restricting exports to only manufacturers. The Tribunal rejected the lower authority's restrictive interpretation of 'place of removal,' asserting that in the case of iron ore exports, mines could be considered the place of removal. This decision was crucial in overturning the rejection of the refund claim based on the incorrect understanding of the place of removal.Application of Self-Certification Provision:The Tribunal referred to Circular No.120/01/2010-ST, which simplified the refund process under Notification No.41/2007-ST by introducing self-certification or certification by a Chartered Accountant to establish the correlation between input services and exports. The Tribunal highlighted that the scheme's simplification in Budget 2009 aimed to streamline the refund process and reduce the burden of document scrutiny. Consequently, the Tribunal remanded the matter back to the Adjudicating authority to consider the case based on Chartered Accountant's certification to establish the required correlation under the notification. This decision aligned with the procedural guidelines outlined in the circular, emphasizing the importance of self-certification for refund claims.In conclusion, the Tribunal's judgment addressed the issues of refund claim rejection on GTA services, interpretation of 'place of removal,' and the application of self-certification provisions for establishing correlation between input services and exports. By clarifying the notification requirements and procedural guidelines, the Tribunal ensured a fair assessment of the appellant's refund claim and upheld the principles of simplification and efficiency in the refund process.