The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) rejected the appellant’s refund claim on storage services stating that refunds for service tax paid on input services are allowed only when the services are used directly for export purposes and beyond the place of removal.
Royal Foodstuffs Pvt. Ltd., the appellant is a manufacturer-exporter of fruit pulp juices and vegetable products under Chapter 8 of the Central Excise Tariff Act, 1985. The appellant filed refund claims for service tax paid on input services such as storage and warehousing, courier services, and insurance services under Notification No. 52/2011-S.T. dated 30.12.2011 and Notification No. 41/2012-S.T. dated 29.06.2012.
The AA rejected the claim citing that the required details such as the IEC/IFSC code, the type of courier, and the name and address of the recipient, were not provided. For insurance services, the policy was for buildings, machinery, and raw material storage, not for export goods and these services were not used for exporting the final products.
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On appeal, the Commissioner (Appeals) upheld the rejection stating non-fulfillment of the notification requirement. Aggrieved, the appellant appealed before the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) arguing that the disputed services (storage and warehousing, courier, and insurance) were important for their business operations.
The appellant’s counsel submitted that the services were directly linked to the export of goods, and therefore, the service tax paid on these input services was eligible for a refund.
The two-member bench comprising S.K. Mohanty (Judicial Member) And M.M. Parthiban (Technical Member) observed that notification no. 52/2011-S.T. dated 30.12.2011 which mentioned a scheme for the refund of service tax paid on services used exclusively for the export of goods.
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The tribunal observed that storage and warehousing services were used for raw materials and semi-finished goods and not directly for exported products. The tribunal observed that these services were not utilized beyond the “place of removal” or directly for export purposes as required under the notifications.
So, the tribunal found no infirmity in the Commissioner (Appeals)’s order and upheld the Commissioner (Appeals)’s order. The appeal of the appellant was dismissed.
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