The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the export service of basic grade pig iron is eligible for a refund of Krishi Kalyan Cess (KKS) of Service Tax defined under section 161(5) of the Finance Act,1994.
MMTC Limited, the appellant assessee was a Merchant Exporter & holder of Service Tax Registration and Import Export Code for providing the export services and applied rebate/refund claim for the export of Basic Grade Pig Iron to Rayang/Thailand under the cover of Shipping Bill and export of Non-Alloy Pig Iron from Paradeep Port in terms of Notification No.41/2012 of Service Tax.
The assessee appealed against the order passed by the adjudicating authority to confirm the rejection of the rebate/refund claim of Swatch Bharat Cess (SBC) and KKC against the assessee.
A.D.Roy and Sanjukta Roy, the counsels for the assessee contended that as per section 161 of the Finance Act, 2016 SBC and KKC respectively are levied as Service Tax and the levy of these two taxes were governed by Chapter V of the Finance Act which shall apply to them amongst other things in respect of refund like Service Tax under Chapter V of the Finance Act.
Also submitted that all provisions related to refund of service tax under the Finance Act shall apply to a refund of SBC and KKC.
S.S.Chattopadhyay, the counsel for the department relied on the decisions made by the lower authorities and contended that when a particular kind of duty was exempted, other types of duty or cess imposed by different legislation for different purposes cannot be said to have been exempted, therefore, the assessee was not entitled to a refund of SBC and KKC.
The Bench observed that as per Notification No.41/2012- Service Tax granted a refund of service tax paid on the taxable services used for the export of goods by an exporter and since the SBC and KKC, both had been treated as service tax, they are eligible for the refund.
Also observed that the Notification was enacted under powers granted under Section 93A of the Chapter V of the Finance Act which was granting rebate of Service Tax. Therefore, KKC portion of Service Tax was not refunded as rebate then it will go against the statutory mandate.
While allowing the appeal, the two-member bench comprising Ashok Jindal (Judicial) and Anpazhakan (Technical) held that the assessee was eligible for the refund claim of KKC.
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