2019 (5) TMI 1435 - AT - Service Tax

Appellant qualifies for refund under Notification No. 52/2011-ST, Tribunal overturns Lower Appellate Authority decision

M/s S.K. Sarawagi & Co. Pvt. Ltd. Versus Commissioner of CGST & Central Excise, Kolkata.

The Tribunal held that the appellant was eligible for the refund claim under Notification No. 52/2011-ST, qualified as the exporter under relevant legal ... Refund claim - N/N. 52/2011 dated 30.12.2011 - Exporter or not - HELD THAT:- The assessee is in appeal before the Tribunal on the ground that all the conditions are satisfied under Notification No.52/2011 and also as per the clarification issued by the CBEC, vide Circular No. 104/4/2008 dated 12.05.2008 (Para 4.1) being satisfied by the appellant/assessee and the export being made through M/s MMTC Ltd. which was the statutory provision in the Trade Policy Schedule-II, SL. 80 and the money is realized after the export of the goods. The service tax paid in terms of the services utilized in the export of goods to be claimed as refund was rightfully sanctioned. It is apparent that M/s MMTC Ltd. stands indemnified of all claims, damages etc, of the foreign buyer and/or vessels owner in respect of exports to be made through them and M/s S. K. Sarawagi & Co. Pvt. Ltd. (the appellant herein), the owner of the goods, is not allowed to export directly under Section 2 (20) of the Customs Act, 1962 as well as under the definition of ‘exporter’ in the Foreign Trade Policy, 2009-14 under Chapter 9.26. The Role of M/s MMTC Ltd. is only like an intermediary because of the restriction imposed in the Foreign Trade Policy Schedule-II, SL. 80 which states that the Manganese Ore can only be exported through MMTC Ltd. The restriction imposed in respect of Manganese Ore is governed by Section 3 of the Import and Export (Control) Act, 1947. The role of M/s MMTC Ltd. in the export of Manganese Ore is a compulsion to be observed by the appellant/assessee and it is not by choice which has led to the present dispute. Appeal allowed - decided in favor of appellant. Issues Involved:1. Eligibility of the appellant for a refund claim under Notification No. 52/2011-ST dated 30.12.2011.2. Determination of the appellant as the 'exporter' under the relevant legal provisions.3. Compliance with the Foreign Trade Policy and related statutory requirements.4. Validity of the Lower Appellate Authority's decision to set aside the Order-in-Original.Issue-wise Detailed Analysis:1. Eligibility of the appellant for a refund claim under Notification No. 52/2011-ST dated 30.12.2011:The appellant filed a refund claim of Rs. 5,35,095/- under Notification No. 52/2011-ST dated 30.12.2011 for the export of Manganese Ore. The Assistant Commissioner initially granted a refund of Rs. 4,59,422/-. The Department contested this, arguing that the shipping bills and BRCs were in the name of M/s MMTC Ltd., not the appellant, thus violating para 3(a) of the said Notification. The Tribunal found that the appellant satisfied all conditions under Notification No. 52/2011-ST and the CBEC Circular No. 104/4/2008 dated 12.05.2008. It was established that the services utilized for exporting goods were rightfully claimed for a refund.2. Determination of the appellant as the 'exporter' under the relevant legal provisions:The Department argued that the appellant was not the exporter since the shipping bills and BRCs were in the name of M/s MMTC Ltd. The Tribunal, however, found that the appellant had a mining lease and was responsible for the services rendered until the goods were loaded onto the vessel. The Tribunal referred to the definition of 'exporter' under Section 2(20) of the Customs Act, 1962, and the Foreign Trade Policy, 2009-14, concluding that the appellant qualified as the exporter since they were the owners of the goods and intended to export them through MMTC due to policy restrictions.3. Compliance with the Foreign Trade Policy and related statutory requirements:The Tribunal noted that the Foreign Trade Policy Schedule-II, SL No. 80, restricted the direct export of Manganese Ore, allowing export only through MMTC or MOIL. The Tribunal found that MMTC's role was merely intermediary due to this restriction. The Tribunal also referred to the Supreme Court's decision in Daruka & Co. Vs. Union of India, which upheld the government's right to channelize export through selected agencies for public interest. The Tribunal concluded that the appellant complied with the policy and statutory requirements.4. Validity of the Lower Appellate Authority's decision to set aside the Order-in-Original:The Lower Appellate Authority set aside the Order-in-Original, which had granted the refund, based on the Department's appeal. The Tribunal reviewed the detailed order passed by the Refund Sanctioning Authority, which had thoroughly examined the claim and found it in order. The Tribunal upheld the Refund Sanctioning Authority's decision, finding no infirmity in the original order. Consequently, the Tribunal set aside the Lower Appellate Authority's decision and allowed the appellant's appeal with consequential benefits.Conclusion:The Tribunal concluded that the appellant was eligible for the refund claim under Notification No. 52/2011-ST, qualified as the exporter under the relevant legal provisions, complied with the Foreign Trade Policy, and that the Lower Appellate Authority's decision was erroneous. The Tribunal upheld the original refund order and allowed the appellant's appeal.