2010 (12) TMI 1260 - AT - Service Tax

Refund claim - Notification No. 41/07-ST dated 06.10.2007 - Duty drawback - held that - since the goods in question have been exported without availing drawback of service tax under the Customs, Central Excise Duties and Service Tax drawback Rules, 1995, therefore recovery of refund claim of service tax paid on specified services on the ground that goods have been exported under claim of drawback is not tenable.

Summary

Issues:
1. Appeal against Revisional Order under section 84 of the Finance Act 1994.
2. Benefit under Notification 41/07-ST dated 6.12.2007.
3. Interpretation of conditions for refund claim under Notification 41/07-ST.
4. Comparison with a previous Tribunal decision.
5. Dispute over the grant of benefit to service tax payers under Notification 41/07-ST.

Analysis:
1. The appeal was filed by Revenue against a Revisional Order under section 84 of the Finance Act 1994, which dropped proceedings initiated due to an erroneous order by the Adjudicating Authority. The Revisional Order granted relief to the assessee, acknowledging that service tax paid on taxable services not used as input services in manufacturing export goods was not considered in fixing Duty Drawback Rates. This led to the appellant successfully seeking a refund.

2. The Revisional Order examined the benefit available to the appellant under Notification 41/07-ST dated 6.12.2007. The Revisional Authority noted that services availed after goods clearance from the factory did not fall under taxable services used as input services for manufacturing or processing export goods. The condition I(e) was withdrawn from the notification to remove ambiguity. The Authority held that since goods were exported without availing drawback of service tax, the refund claim on specified services under the notification was not sustainable.

3. The respondent's counsel highlighted a Tribunal decision (Commissioner of Central Excise, Meerut vs. Anand Track & Field Equip. Pvt. Ltd.) where a similar issue was considered, and the Revenue's appeal was dismissed. The Revenue's representative criticized the Revisional Order, arguing that Notification 41/07-ST did not provide any benefit to service tax payers until the export point.

4. Upon hearing both sides and reviewing the records, it was noted that while the respondent's case aligned with the previous Tribunal decision, the reasoning in the Revisional Authority's order supported the original decision to grant the refund. As there was no indication of the Revenue appealing the Single Member Bench decision to a higher court or any stay on that order, the Revenue's appeal was dismissed.

5. The judgment emphasized that the Revisional Authority's decision, in line with the original authority and supported by legal citations, warranted dismissing the Revenue's appeal. The lack of information on the Revenue's challenge to the Single Member decision further strengthened the dismissal of the appeal.

This detailed analysis outlines the key issues addressed in the judgment, including the interpretation of legal provisions, comparison with previous decisions, and the reasoning behind dismissing the Revenue's appeal.