Refund of Service Tax under Notification No. 41/2007-ST

PJ/Case Laws/2012-13/1081

Case: CCE, DAMAN V/S M/S ASIAN PLASTOWERS PVT. LTD

Citation: 2012-TIOL-157-CESTAT-AHM

Issue:- Refund under Notification No. 41/2007-ST on GTA service – service tax payable by recipient, registration of GTA service provider not required.

Filing of single appeal for two different orders of the Sanctioning Authority – not tenable – separate appeals to be filed.

Brief Facts:- Appellant filed refund of service tax paid on GTA service under Notification No. 41/2007-ST dated 06.10.2007. Refunds were sanctioned to the appellant buy two orders.

Revenue filed appeal against the sanction of refund on the ground that the invoice issued by the Service Provider did not contain the registration number of the service provider. That the details of payment of service tax were not verified.

The Commissioner observed that against two orders one appeal has been filed and decided to consider the appeal against one order dated 24.07.2009 only and rejected the appeal.

Revenue is in appeal against the said order.

Appellant’s Contention:- Revenue contended that the orders were passed by the same Adjudicating Authority, therefore, one appeal was sufficient and therefore, the Commissioner (A) wrongly considered their appeal only against one order.

The Assistant Commissioner, while sanctioning refund, had not verified whether the service tax has been paid or not.

Respondent’s Contention:- The respondents submitted that the amount is only Rs 27,085 which is less than Rs 50000 and therefore the appeal may be rejected. Further, they have also stated that the Commissioner (Appeals) order was in accordance with the law and needs no interference. Respondents also took objection to the Performa used for filing appeal.

Reasoning of Judgment:- With regard to format of appeal, it was found that the Tribunal in the case of KRISHNA EXPORT V/S CCE, NEW DELHI [2011 (266) ELT 374 (Tri-Del) has held that no application of refund can be denied on the ground of non filing of appeal in prescribed format as this is a technical and rectifiable mistake.

With regard to finding about filing of single appeal against two orders, it was held that Section 85 provided for filing of appeal by the aggrieved party. It was deduced by the Tribunal that in respect of each order, a separate appeal is required to be filed. It was noted that in present case, two separate numbers have been given to both orders and it is not even a common order covering two refund claims, but separate orders have been issued. Therefore, filing of single appeal by Revenue was not justified.

With regard to verification of details of service tax payment, it was held that Revenue has not shown as to how the finding of assessee being eligible for refund claim is incorrect. There is no submission that service tax was not paid.

It was held that the proper course was to verify whether the service tax is paid by the service provider and the receiver and then file the appeal. Merely because specific finding is not given by the Sanctioning Authority, the contention cannot be accepted.

With regard to non-registration of service provider, it was held that as the liability was on service recipient, naturally the Service provider may not be registered and therefore, cannot provide registration number. It was held that once it is clear that service tax is paid by recipient, he will be eligible for refund and on technical ground without showing that payment was not made, refund cannot be rejected.

Decision:- Appeal rejected.

Comment:- This decision is landmark decision in respect of claim of service tax to exporters. The department has raised number of objections to deny the refund claim. We have also written a series of article of “Johnny and service tax refund” to highlight the problems faced by exporters. The refund was denied as the invoice did not contain the registration number of service provider. But it was not established that he has not paid the service tax then the refund cannot be denied on such technical issues.

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PJ/Case Laws/2012-13/1081

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