2016 (12) TMI 1608 - AT - Service Tax

Refund claim - Education Cess and Secondary and Higher Secondary Education Cess paid on services used for export of goods - survey fees - short-shipment of quantity - Held that - the claim on account of Education Cess and Secondary and Higher Education Cess is inadmissible in terms of N/N. 41/2007-S.T., dated 6-10-2007 - The violation of statutory provisions on limitation cannot be treated as mere technical nature of breach. Therefore, the denial of Cenvat credit on this issue cannot be accepted. Regarding rejection of refund claim on short shipment, N/N. 41/2007-S.T. provides that the Central Govt. exempts the taxable services specified in the schedule received by an exporter and used for export of goods from the whole of the Service Tax leviable thereon - In the present case, there is no dispute that the taxable services were used for export of goods which was found short shipped. Revenue has not disputed that the taxable service used for export of goods and thereafter, there is a short shipment which cannot disentitle the appellant from the benefit of the notification. Therefore, refund claim on short shipment of quantity of exported goods cannot be rejected - refund claim on proportionate deduction of service tax on short shipment is allowed Appeal allowed - decided partly in favor of appellant.

Summary

Issues:
1. Refund claim on Education Cess and Secondary and Higher Secondary Education Cess.
2. Refund claim on short shipment of quantity.

Analysis:
1. The appellant filed a refund claim on Education Cess and Secondary and Higher Secondary Education Cess paid on services used for export of goods, survey fees, and short-shipment of quantity. The Adjudicating Authority rejected the refund claims. The Commissioner (Appeals) allowed the refund claim on survey fees but upheld the rejection of the refund claim on Education Cess and Secondary and Higher Secondary Education Cess. The Commissioner noted that the refunds were filed beyond the six-month time limit specified in Notification No. 41/2007-S.T., dated 6-10-2007. The appellant argued that the breach was merely technical, but the Commissioner disagreed, stating that the violation of statutory provisions on limitation cannot be considered a technical breach. Therefore, the denial of Cenvat credit for Education Cess and Secondary and Higher Secondary Education Cess was upheld.

2. Regarding the rejection of the refund claim on short shipment, the appellant contended that the service tax was deposited against the quantity actually shipped for which the refund claim was made. Notification No. 41/2007-S.T. exempts taxable services received by an exporter and used for export of goods from Service Tax. The notification emphasizes that services used for export of goods would be exempted. The Tribunal found that the taxable services were indeed used for export of goods, despite the short shipment. The Tribunal held that the short shipment should not disentitle the appellant from the benefit of the notification. Consequently, the refund claim on the short shipment of the quantity of exported goods was allowed.

In conclusion, the impugned order was modified to allow the refund claim on the proportionate deduction of service tax on the short shipment. The appeal was partly allowed based on the above discussions.