Tribunal Allows Refund Claim of M/s Sigma Moulds and Stampings Pvt. Ltd. in Service Tax Appeal

Case Name:

Service Tax Appeal No.60592 of 2018 [SM] - M/s Sigma Moulds and Stampings Pvt. Ltd. vs The Commissioner of Central Excise and Service Tax, Gurgaon-II

Key Takeaways:

1. The revenue department mistakenly considered the date of issue of cheques as the date of availing the services or the date of issue of invoices.
2. The services availed by the appellant were those of the CHA, which are required at the port of export and are bound to be later than the date of removal of goods from the factory and before the actual export.
3. The wrong mention of the notification number does not invalidate the appellant’s right to claim the refund.
4. The tribunal referred to previous cases where similar credit was allowed in identical circumstances.
5. The tribunal set aside the impugned order and allowed the appeal with consequential relief, if any, as per law.

Case Synopsis

This is a final order from the Customs, Excise & Service Tax Appellate Tribunal in Chandigarh, India. The case involves M/s Sigma Moulds and Stampings Pvt. Ltd., a company engaged in the manufacture of auto parts, who had claimed a refund of service tax paid on input services availed by them. The revenue department rejected the refund claim on the grounds that the invoices of the input services claimed were dated after the date of export and that the appellants had claimed a superseded notification for refund.

The appellant argued that the revenue department erred in considering the dates of issue of cheques as the dates of invoices, that “CHA Services” are indeed input services, and that the wrong mention of the notification number should not be a reason for rejecting the refund claim. The appellant cited several cases in support of their arguments.

After hearing both sides and examining the records of the case, the tribunal found that the department had mistakenly considered the date of issue of cheques as the date of availing the services or the date of issue of invoices. The tribunal also noted that the services availed were those of the CHA (Customs House Agent), which are required at the port of export and are therefore bound to be later than the date of removal of goods from the factory and before the actual export. The tribunal concluded that the services were indeed availed before export and that the department’s contention was incorrect. The tribunal also mentioned that similar credit had been allowed in a previous case involving Sigma Vibracoustic (India) Pvt. Ltd. The tribunal further stated that the wrong mention of the notification number does not take away the appellant’s right to claim the refund.

Based on these findings, the tribunal set aside the impugned order and allowed the appeal with consequential relief, if any, as per law.

FAQ:

Q1: What was the reason for rejecting the refund claim by the revenue department?

A1: The revenue department rejected the refund claim on the grounds that the invoices of the input services claimed were dated after the date of export and that the appellants had claimed a superseded notification for refund.

Q2: What were the arguments presented by the appellant?

A2: The appellant argued that the revenue department erred in considering the dates of issue of cheques as the dates of invoices, that “CHA Services” are indeed input services, and that the wrong mention of the notification number should not be a reason for rejecting the refund claim.

Q3: What was the decision of the tribunal?

A3: The tribunal found that the department had mistakenly considered the date of issue of cheques as the date of availing the services or the date of issue of invoices. The tribunal also noted that the services availed were those of the CHA, which are required at the port of export and are therefore bound to be later than the date of removal of goods from the factory and before the actual export. Based on these findings, the tribunal set aside the impugned order and allowed the appeal with consequential relief, if any, as per law.

The appellants, M/s Sigma Moulds & Stampings Private Limited, are engaged in the manufacture of auto parts; having exported the goods they have claimed refund of service tax of Rs.40,906/-, paid on input services availed by them. Revenue was of the opinion that the invoices of the input services claimed are dated after the date of export that is the date of Form A-1 and that the appellants have claimed Notification No.17/2009 for refund whereas

the said notification was superseded by Notification No. 52/2011-ST dated 30.12.2011 which was further superseded by Notification No.41/2012.

Accordingly, Revenue rejected the refund claimed by the appellants vide Order-in-Original No.177/CE/2013-14/R dated 13.06.2013; on an appeal filed by the appellants, Commissioner (Appeals), vide impugned order No.69/CE/APPL-II/Delhi/2015 dated 29.03.2015, upheld the OIO. Hence, this appeal.

2. Shri Joy Kumar, learned Counsel for the appellants submits that the Revenue erred in considering the dates of issue of cheques by the appellants to their service providers as the dates of invoices; he further submits that Revenue erred in holding that “CHA Services” are not “input services”; he further submits that Department cannot reject the refund merely for the reason of wrong mention of the number of the notification. He relies on the following cases:

Sigma Vibracoustic (India) Pvt. Ltd. –Chandigarh vide Final Order No.60669-60670/2017-SM[BR].

Kennametal India Ltd. – 2016 (46) STR 57 (Tri. Bang.)

Mahindra Reva Electric Vehicles (P) Ltd. – 2017 (3)

GSTL 75 (Tri. Bang.)

Dynamic Industries Ltd. – 2014 (35) STR 674 (Guj.)

Bhilai Engineering Corporation Ltd. – 2016 (41) STR

774 (Tri. Del.)

3. Shri Aneesh Dewan, learned Authorized Representative for the Department, reiterates the findings of the OIO and the impugned order.

4. Heard both sides and perused the records of the case. I find that whereas the Department claims that the invoices of the service availed is later than the date of export, the appellants submit documentary proof to the effect that the services were availed before the date of export and that the Department has mistakenly considered the date of issue of cheque to the service provider as the date of availing of the service or the date of issue of invoice by the service provider. Further, I find that the services availed are that of the CHA whose services are required at the Port of export and therefore, the services are bound to be later than the date of removal of goods from the factory and before the actual export. For this reason, I find that the services are availed before export. Therefore, the contention of the Department is incorrect. I find that Tribunal has allowed credit in identical circumstances in the case of Sigma Vibracoustic (India) Pvt. Ltd. (supra). Moreover, I find that wrong mentioning of the number of

the notification does not take away the right of the appellant. I draw strength from the case laws cited above.

5. In view of the above, I find that the Department has not made out any case for rejection of the refund claimed by the appellant.

Therefore, the impugned order is not sustainable. Accordingly, the same is set aside and the appeal is allowed with consequential relief, if any, as per law.

(Operative part of the order pronounced in the open Court)

(P. ANJANI KUMAR)

MEMBER (TECHNICAL)