Denial of service tax refund claims under Notification 41/2007 on account of procedural lapses.

PJ/Case Laws/2012-13/1344

Case:- DURHAN SPINTEX & HOLDING PVT.LTD VERSUS COMMISSIONER OF S.TAX, AHEMDABAD

Citation: - 2012 (28) S.T.R. 366 (Tri-Ahmd)

Brief facts: - The Brief fact of the case is that the refund of service tax claimed on port services has been rejected on the ground that the appellant have not got invoice from the service provider but from the CHA and also for the reason that the service provider was neither the port nor authorised by the port.

The Commissioner (Appeals) has taken a view that in respect of service providers namely M/s. Freight Line India Pvt. Ltd., M/s. Maersk India Pvt. Ltd., M/s. Ace India Pvt. Ltd. and M/s. Anchor Lines and Shipping Lines/Shipping Line Agents under service provided by them are business auxiliary service which is not specified for refund.

As regards GTA service, the refund claim has been rejected on the ground that for transport of goods from ICD to port of export, details like shipping bill number, export invoice number, description of export goods etc. are not available.

As regards technical testing and analysis service, claim has been rejected on the ground that the invoice is in the name of M/s. Ashima Ltd. who has made the payment. In this case also if the appellants are able to show the evidence of payment of service tax by them and the relationship of the service with the goods exported and also evidence to show that M/s. Ashima Ltd. have not taken the credit of service tax in their books of account, refund may have to sanctioned to the appellants. In this case it has been held that the appellants not able to show any document that service tax was paid by them.

Even though appeals have been filed against different orders, all the appeals were heard together since the issue relates to eligibility of the appellants for refund of service tax paid on various services under Notification No. 41/2007. While some of the services are common to all the orders, some of them are not. Since the notification under which refund is claimed and most of the services are common to all the appeals, a common order is being passed.

Appellant Contention:- The Appellants submit that the CHA has acted as a pure agent and has collected the amount from them and paid to the service provider and appellants have provided all the documents and proof of payment of service tax and therefore they are eligible. The very same issue had come up before the Tribunal earlier and this Tribunal has taken the view that in respect of port service, THC charges, REPO/BL charges etc. Whether service provider was authorised or not, if the service tax has been paid towards port service, while granting refund, the refund sanctioning authority cannot sit in judgment to say that the service received was not port service. Once the services are covered under the statutory definition of port service and service tax has been paid, refund is admissible. In view of the above conclusions reached by the Tribunal in the case of Ramdev Food Products Pvt. Ltd. - 2010 (19) S.T.R. 833 (Tn. - Ahmd.) and in the case of Indoworth India Ltd. - 2012 (25) S.T.R. 78 (Tn. - Mumbai), the appellant is eligible for the refund to service tax paid on port services.

As regard GTA appellants relied upon the decision of the Tribunal in case ofDishman Pharma and Chemicals Ltd. - 2011 (21) S.T.R. 246 (Tn. – Ahmd) . In this decision the Tribunal took a view that refund claim cannot rejected on technical grounds like invoices issued by transport agencies do contain all the details. If the appellant is able to correlate the export goods 1% the documents supporting service tax payment, such a refund should be granted. Therefore the issue relating to service tax on GTA service will have to be considered in the light of the decision cited above and considered afresh.

As regard Technical Testing and analysis, the appellant relied upon the decision in the case of F. Ahmed & Co. - 1993 (67) E.L.T. 759 (G.O.I.) to submit that merchant exporter is entitled to rebate and for this purpose a no objection certificate from the manufacturer would be adequate. It is their contention that the decision is applicable to the present case.

Reasoning of judgement :-The Tribunal held that what is required to be seen whether service tax was paid for the service rendered under the admissible services category or not. If the service tax has been paid under business auxiliary service, appellant may not be eligible. Before sanctioning refund in respect of services provided, the category of service and for which service tax has been paid may be verified from the invoice or any other document that may be produced by the appellants before a decision is taken.

The Tribunal Further held that if the appellant is able to correlate the export goods 1% the documents supporting service tax payment, such a refund should be granted. Therefore the issue relating to service tax on GTA service will have to be considered in the light of the decision cited above and considered afresh. If appellant cite any other decision of the judicial forum, such decision also should be considered.

As regards Technical Testing and analysis Service Tribunal is not convinced with the decision cited above. Appellants have to show non availment of Cenvat credit by the manufacturer and the fact of payment of service tax by them and fulfillments of other conditions to be eligible for refund of service tax paid on technical and analysis service.

Further GTA service received for transportation of empty container from the premises of exporter is also admissible in view of the fact that the notification provides for refund of service tax paid in respect of services used in relation to export and in this case it cannot be denied that the transport of empty container to the exporter's premises was necessary and was received in relation to exported goods.

One of the claims has been rejected in Order-in-Appeal No. 343/2005 dated 30-12-2009 on the ground that the same is time barred. On this issue there are subsequent decisions of the Tribunal directly applicable to Notification 41/2007 and subsequent amendment notifications. If the appellants cite the cases, the applicability of these decisions may be considered and the refund claim rejected on the ground of time bar also may be considered in the light of decisions, if any that may be cited by the appellants.

In the result the impugned orders are set aside and the matter is remanded to the original adjudicating authority for fresh consideration of all the refund claims in the light of observations made in this order.

Decision: -Appeal disposed off

Comment:- This is yet another case that depicts the difficulty faced by exporters in claiming refund of service tax in respect of goods exported. Refund claims are denied for mere procedural lapses even when it is possible to correlate the service tax paid in respect of exported goods.

Comments

PJ/Case Laws/2012-13/1344

Post a Comment

Query