Appellant Entitled to Service Tax Refund on De-Oiled Cake Transport Under Notification 25/2012-S.T.

The CESTAT Kolkata allowed the appeal, holding that the appellant was entitled to refund of service tax paid on transportation of de-oiled cakes. The rejection based on non-submission of consignment notes was a new ground not raised in the SCN, and the documents submitted (bill and road challans) were not properly considered. The tribunal found no distinction between "oiled cake" and "de-oiled cake" for the purpose of exemption under Notification 25/2012-S.T., Sl. No. 20(j). Since the appellant was eligible for the exemption, the refund claim was upheld and the appeal allowed.

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ISSUES:

Whether transportation of de-oiled cakes used for captive consumption qualifies for exemption under Notification No. 25/2012-S.T. dated 20.06.2012 as amended by Notification No. 03/2013-S.T. dated 01.03.2013.Whether refund of service tax paid on transportation of de-oiled cakes can be denied on grounds not raised in the Show Cause Notice (SCN), specifically non-submission of consignment notes.Whether the appellant satisfied all conditions for claiming refund under Section 11B of the Central Excise Act, 1944.Whether interest is payable on delayed refund under Section 11BB of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994.

RULINGS / HOLDINGS:

Transportation of de-oiled cakes used for feeding poultry is exempt under Sl. No. 20(j) of Notification No. 25/2012-S.T. dated 20.06.2012 as amended, as "oiled cake" and "de-oiled cake" are held to be synonymous.Refund cannot be denied on new procedural grounds such as non-submission of consignment notes when such grounds were not raised in the SCN, as adjudication beyond the scope of the SCN violates principles of natural justice.The appellant fulfilled all statutory conditions for refund claim, including payment of service tax under reverse charge, non-passing of incidence of tax to any other person, and timely filing of refund application under Section 11B of the Central Excise Act, 1944.The appellant is entitled to interest on delayed refund under Section 11BB of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994, since refund was not paid within the stipulated three-month period.

RATIONALE:

The Court applied the exemption provisions under Notification No. 25/2012-S.T. dated 20.06.2012 and its amendment Notification No. 03/2013-S.T., interpreting "oil cakes" and "de-oiled cakes" as identical for exemption purposes.The principle that a Show Cause Notice is the foundation of adjudication was emphasized, citing precedents holding that orders beyond the scope of the SCN violate natural justice and are unsustainable.The Court relied on Section 11B of the Central Excise Act, 1944 for refund eligibility and Section 11BB read with Section 83 of the Finance Act, 1994 for entitlement to interest on delayed refunds.Precedents cited include decisions affirming that substantive benefits cannot be denied on procedural grounds not raised in the SCN, reinforcing the principle against unjust enrichment and adherence to procedural fairness.

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