Page 178 - GSTL_2nd July 2020 _Vol 38_Part 1

96 GST LAW TIMES [ Vol. 38
tled for refund of Service Tax for transportation of goods by rail which they paid
inadvertently. The facts for the matter in brief are as follows. The appellants are
engaged in the manufacture of various kinds of masala products such as Sabji
Masala, Chhole Masala etc. etc. and for this purpose they purchase agriculture
produce which enhances the aroma, flavour, taste etc. of the food e.g. chilly, tur-
meric, black pepper etc. After mixing them together, the appellant packed the
product in pouches and cleared them by naming them as Sabji Masala, Chhole
Masala etc. For distributing these products across the country, the appellants
enter into an agreement with ‘Gati Kintestsu Express Pvt. Ltd.’ (GKEPL) in the
year 2012 for transporting these products to the buyers situated in different parts
of the country through Rail. During the same period, they also availed services of
other transporters in transportation of goods by road. GKEPL i.e. the service
provider issued invoices to the appellant for transportation of appellant’s prod-
ucts by Rail. Since the said transportation by Rail was clearly exempted from
Service Tax by virtue of Notification No. 25/2012-S.T., dated 20-6-2012, therefore
GKEPL did not charge any Service Tax in the invoices issued by them to the ap-
pellant. But since the Service Tax on transportation of goods by road is liable to
be discharged by appellant under Reverse Charge Mechanism, therefore the ap-
pellant, under the mistaken belief that they are liable to pay Service Tax under
Reverse Charge Mechanism on transportation of goods by rail also, computed
the Service Tax and deposited the same under some other accounting head. Dur-
ing the period in issue i.e. November, 2012 to April, 2013, the appellant errone-
ously paid Service Tax amounting the Rs. 4,13,603/-. When the appellant real-
ized their mistake, on 28-5-2013 they filed refund claim of the aforesaid amount
along with the requisite documents. As a result of which on 10-9-2013 a show
cause notice was issued to them as to why refund claim of Rs. 4,13,603/- should
not be rejected. The Adjudicating Authority vide Order-in-Original dated 11-10-
2013 rejected the refund claim and the same was upheld by the first Appellate
Authority i.e. the Commissioner vide impugned order dated 11-6-2018.
3. I have heard Learned Counsel for the appellant and Learned Author-
ised Representative on behalf of Revenue and perused the appeal memo along
with its annexure and also the synopsis and other documents filed by the respec-
tive sides. The Learned Counsel for the appellant submitted that both the author-
ities below have gone beyond the show cause notice and the rejection of refund
claim has been done on the grounds which are not proposed in the show cause
notice. He further submitted that during the course of hearing before the adjudi-
cating authority on 30-9-2013, the appellant was directed to produce the details
of the bill of Service Tax paid by them under reverse charge mechanism and the
same was provided to the said Authority vide letter dated 4-10-2013. Along with
the said letter, the appellant provided the breakup of transport of goods by Rail
and by Road and the copies of all invoices along with balance sheet and P & L
Account were also provided to the said authority, but none of them were taken
into consideration by the Adjudicating Authority while passing the Order-in-
Original dated 11-10-2013. He further submitted that the Learned Commissioner
while passing the impugned order erred in recording that the letter dated 4-10-
2013 appears to have been submitted after the issuance of Order-in-Original
which is factually incorrect. He also submitted that the invoices along with the
letter dated 4-10-2013 clearly establishes that the service of transportation of
goods by Rail has been provided by ‘Gati-Kintetsu Rail Solutions’, a division of
GKEPL to the appellant. According to Learned Counsel, the authorities below
have also erred in not extending the benefit of Notification No. 25/2012-S.T. to
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