2013 (3) ECS (215) (Tri-Ahd)

IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

WEST ZONAL BENCH AT AHMEDABAD
Orchev Pharma P. Ltd.
Vs
CCE, Rajkot

Appeal No.

E/1123/11.

Arising out of

OIA No. 105/2011/COMMR (A)/RBT/RAJ Dated 27.07.2011

Passed by

Commissioner of Central Excise & Customs (Appeals),

Rajkot

Appellant

Orchev Pharma P. Ltd.

Respondent

CCE, Rajkot

:
:

Shri P. V. Sheth (Adv.)

Shri K. Sivakumar (A.R)

Represented by
For Appellant
For Respondent
CORAM
MR. M.V. RAVINDRAN, HONBLE MEMBER (JUDICIAL)
Date of Hearing / Decision: 29.05.2013
ORDER No. A/10780/WZB/AHD/2013 dated 29.05.2013
On perusal of records, I find that the refund claim filed for the quarter ended
March 2009, June 2009 and September 2009 under the Notification No.
17/2009 are clearly hit by limitation as appellant filed refund claim on 31.05.2010

under Notification No. 41/2007 ST. The said notification requires an assessee to
file a refund claim within six months from end of the relevant quarters. [Para 7]
Per: M. V. Ravindran, Mr.:
1.

This appeal is directed against the Order in Appeal No. 105/2011/COMMR

(A)/RBT/RAJ dated 27.07.2011.

2.

The brief facts of this case are that the appellants have filed the refund claim
under Notification No. 41/2007 and 17/2009 dated NIL amounting to Rs.
4,41,633/- with the Service Tax Division, Rajkot which was received by them on
31/05/2010. As per para 2 (b) of the said notification, manufacturer exporter who
is registered assessee under the Central Excise Act, 1944, shall claim the
exemption by filing a claim of refund of service tax paid on the specified services
to the Assistant Commissioner / Deputy Commissioner of Central Excise having
jurisdiction over the factor of manufacturer. Accordingly, Assistant Commissioner,
Service Tax Division has submitted the said claim to the Lower Authority on
25.06.2010. The appellant has claimed the refund of service tax paid on the
services falling under the category of (1) Commission paid to the overseas agent
for sale of goods in foreign market under Section 65 (105) (zzb), (2 DMF (Drug
Master File) Registration charges (3) DRA (Debt Recovery Agent) Services
under Section 19 and (4) Travelling Expenses under Section 19 which are
utilized in relation to exports of goods during the period from 30/08/2008 to
18/03/2010. The appellant has also claimed the refund of the service tax paid on
the services as defined under Section 65 (105) (zzb) of Finance Act, 1944.

2.1.

The exemption to services falling under the category of 65 (105) (zzb) monitored
through various exemption notifications is as under:
Notification
effective date

No.

& Section
service

&

Details

of Condition & Time limit

41/2007 dt 06/10/2007 Exemption Notification

Service Tax
exemption claimed by the
exporter
shall
be
provided by way of
refund.

-The claim for refund

should be filed on a
quarterly basis, within
sixty days from the end
of the relevant quarter
during which the goods
have been exported.
-Date of order permitting

clearance & loading of

the said
goods for
exemption under Section
51 of the Customs Act,
1962 shall be considered
as the date for export of
such goods.
17/2008 Service Tax dt Section 65 (105) (zzb) - as above
01/04/2008
Service provided by a
commission
agent,
located outside India and
engaged under a contract
or agreement or any
other document by the
exporter in India to act on
behalf of the exporter, to
cause sale of goods
exported by him.
32/2008 Service Tax dt - as above
18.11.2008.

-The claim for refund

should be filed on a
quarterly basis within six
months from the end of
the
relevant
quarter
during which the goods
have been exported.

17/2009 Service Tax dt Omitted exemption for

07.07
Section 65 (105) (zzb)
2009
2.2.

From the above table, it transpires that the service tax paid on the above said
services are not exempted with effect from 07.07.2009 by virtue of Notification
No. 17/2009 ST dated 07.07.2009. Therefore, the claim of refund for the
service tax paid on the exports on or after 07.07.2009 is not eligible. Further the
claim of refund for the service tax paid on exports of goods prior to 07.07.2009 is
not eligible in as much as the application for refund filed with the department is
beyond the prescribed time limit of six months and hence the same is not eligible.
Therefore, the refund claim amounting to Rs. 4,13,117/- in respect of the service

tax paid on the services defined under the section 65 (105) (zzb) of Finance Act,
1994, (hereinafter referred to as the Act) under the category of Business Auxiliary
Services, was liable for rejection.
2.3.

The appellant has also claimed for the refund of service tax amount of Rs.
28,516/- totally paid on the services under the category of DMF (Drug Master
File) Registration charges, DRA (Debt Recovery Agent) Services and Traveling
Expenses which are utilized in relation to exports of goods. It further appears that
the services falling under such category are not covered under the notification
no. 41/2007 ST dated 6.10.2007, hence the refund claim amounting to
Rs.28,516/- in respect of the service tax paid under the category of DMF (Drug
Master File) Registration charges, DRA (Debt Recovery Agent) Services and
Traveling Expenses which are utilized in relation to exports of goods are also
liable for rejection.

2.4.

A show cause notice was issued wherein it was proposed that the refund claim
filed by the appellant was rejected by the adjudicating authority after following
due process of law under notification No. 41/2007 and notification no. 17/2009.
He is also denied permission to avail the said amount as cenvat credit.

3.

Aggrieved by such in order, the appellant preferred an appeal before the First
Appellate Authority. The First Appellate Authority also came to the same
conclusion and rejected the appeal.

4.

The ld. Counsel appearing on behalf of the appellant took me through the order
in original and the order in appeal, and submits that both the lower
authorities erred in passing an observation that the appellant is not eligible to
avail cenvat credit, as the said issue was not alleged in the show cause notice
and the appellant had only taken an alternative plea before the lower authorities
to grant them permission to avail the cenvat credit. It is his submission that since
this issue is beyond the show cause notice; findings recorded therein needs to
be struck down. As regards refund claim, he submits that the appellants claim for
refund should not be rejected only on technical ground. It is also his submission
that the said amounts for which refund were claimed were undisputedly for
Service Tax which has been paid by the appellant to their service provider. He
would draw my attention to the refund claim made under Notification 18/2009 and
submits that the service tax paid by the appellant is eligible for refund of duty.

5.

The ld. Departmental representative, on the other hand, would draw my attention
to the fact that the issue is regarding refund of the amount of service tax paid

which is not covered under Notification No. 41/2007 and 17/2009. It is his
submission that the refund claims which has been filed by the appellant, are
beyond limitation and also that the appellant had filed refund claim of the
services which were not covered under the notification is eligible for refund. He
reiterated the findings of the First Appellate Authority.
6.

I have considered the submissions made by both the sides. The issue to be
decided in this case is whether the appellants refund claim need to be rejected
as time barred under Notification No. 42/2007 and also whether the refund of
amount claimed which is within time is not covered under Notification on No.
17/2009.

7.

On perusal of records, I find that the refund claim filed for the quarter ended
March 2009, June 2009 and September 2009 under the Notification No.
17/2009 are clearly hit by limitation as appellant filed refund claim on 31.05.2010
under Notification No. 41/2007 ST. The said notification requires an assessee
to file a refund claim within six months from end of the relevant quarters. To that
extent, refund application filed by the appellant for the quarter ended March
2009, June 2009 and September, 2009 are correctly held as hit by limitation
and there is no reason to interfere in such an order. As regards refund claim for
the quarter ended December 2009 and March 2010, though the refund claims
are within the prescribed time, applicant is required to file refund claim under
Notification No.17/2009 ST. As per notification No. 17/2009 ST, specific
category of services of service provided under section 65 (105) (zzb) of the
Finance Act, 1994 are only eligible for refund. The category of services claimed
as refund by assessee is not eligible for refund hence question of allowing such a
claim of assessee does not arise. Accordingly, in my view, rejection of claim for
the quarter ended December 2009 and March 2010 by both the lower
authorities is also correct and does not require any interference.

8.

I find strong force in the contentions raised by the ld. Counsel that both the lower
authorities have erred in recording that they are rejecting the permission sought
by the appellant for availing Cenvat Credit of Service Tax paid, only on the
ground that show cause notice did not allege or seek for rejection of Cenvat
Credit but was issued for rejection of refund claim, which has been hit by
limitation and not covered under Notification No. 17/2009 ST.

9.

In view of the foregoing facts and circumstances, appeals are rejected and the
impugned orders are upheld to the extent the refund claims filed by the appellant
are rejected.

(Operative portion of the order pronounced in Court )