2010 (11) TMI 186 - AT - Service Tax

Refund of service tax - The respondents have several units engaged in manufacture of finished goods which are partly exported and partly cleared for home consumption - Paid the service tax on the input services viz. CHA services GTA services and Banking services - Under Notification No. 41/07-S.T. dated 6-10-07 they have filed the impugned refund claim for the proportionate amount of credit relating to the exported goods from their Mettupalayam unit. - Held that the impugned input services are specifically listed in the impugned notification entitling the appellants to grant of refund of service tax paid on such input services they should be given a second chance to substantiate their claim by filing adequate documents with necessary details alongwith a Chartered Accountant s Certificate before the original authority - Thus the impugned order is set aside and the matter is remanded for fresh decision

Summary

Issues: Refund claim rejection based on lack of proper co-relation between exported goods, input services, and tax paid. Appellants seeking a second chance to provide necessary documents for reconsideration of refund claim.

Analysis:
The judgment by the Appellate Tribunal CESTAT, CHENNAI involved a case where the appellants had multiple units engaged in manufacturing goods for export and domestic consumption. The appellants had paid service tax on input services like CHA services, GTA services, and Banking services from their Hyderabad office, while exports were done from the Hyderabad office. However, they filed a refund claim for the proportionate credit related to exported goods from their Mettupalayam unit. The dispute arose when the authorities rejected the refund claim citing a lack of proper co-relation between the exported goods, input services used, and tax paid. The appellants' consultant argued that they could provide the necessary details for proper co-relation, similar to what they did for a subsequent period. The Tribunal acknowledged that the exports were not in dispute, and the input services were eligible for a refund as per the notification. Therefore, the Tribunal decided to give the appellants a second chance to substantiate their claim by submitting adequate documents and a Chartered Accountant's certificate to the original authority for reconsideration. The impugned order was set aside, and the matter was remanded for a fresh decision, with the original authority instructed to provide a fair hearing to the appellants before issuing a new order. Ultimately, the appeal was allowed by way of remand, providing the appellants with an opportunity to support their refund claim with the required documentation.