The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that biscuits qualify as food stuff and hence are eligible for service tax refund. The Appellant, M/s. Bansal Biscuits Private Limited, is a manufacturer of biscuits. Apart from being registered under Central Excise, they are also registered with Service Tax Authorities for paying Service Tax under Reverse Charge Mechanism for the GTA services utilized by them.
They were paying Service Tax on Reverse Charge basis on GTA Services. Vide Notification No. 25/2012-ST dated 20/06/2012, when food stuff is transported, the same would be exempted from payment of Service Tax towards GTA expenses. However, without noticing this exemption, the Appellant continued to pay the Service Tax on Reverse Charge Basis during the period July 2013 to March 2014.
After noticing that they have paid Service Tax which is not required to be paid because of exemption granted under Notification No.25/2012- ST dated 20/06/2012 as amended by Notification No. 03/2013-ST dated 01/03/2013, they have filed their refund claim forRs.13,02,317/-. The Counsel relied on the case law of CGST Vs. Glaxo Smithkline Consumer Healthcare Ltd. Co. wherein the Department had dropped the issue of eligibility of exemption at the first stage and no further Appeal was preferred by them.
This also proves that the Department has admitted that biscuits would fall under the category of “Food Stuff”. It was further submitted that biscuits have been held to be food stuff by the Tribunal. Therefore, he submits that the lower authorities are in error in holding that the exemption is not applicable in their case. A Two-Member Bench comprising R Muralidhar, Judicial Member and K Anpazhakan, Technical Member observed that “From the Order, it is clear that the only ground on which the refund claim has been rejected is on account of application of Section 11B i.e. time bar. The Commissioner (Appeals) has also upheld the OIO.
Therefore, it has to be concluded that upto the OIA stage, the only ground on which the refund claim has been rejected is on account of Section 11B provisions. Therefore, there is no necessity for us to go into the aspect as to whether the biscuits can qualify as food stuff so as to be eligible for the exemption.”