2013 (5) TMI 504 - Commissioner - Service Tax

Refund of service tax paid on Courier agency service used for export of goods - export of documents and samples - held that - the transportation of documents and samples by courier service are admitted as taxable service to claim refund but the condition of realisation of export proceeds for claiming the refund is laid only in respect of transportation of goods and not in respect of documents or samples as they do not fetch any export proceeds. It is also evident from the notification that documentary proof to the extent that courier service had been used to export such documents and samples alone is sufficient to claim refund. In the instant case, the appellant had already produced Shipping bill and Airway bill to prove that courier service had been utilized to export goods, documents and samples which is an admitted fact by the Lower Adjudicating Authority. - Refund allowed.

Summary

Issues Involved:
Appeal against Order-in-Original regarding refund claim under Notification No. 41/2007 for service tax paid on courier agency service used for export of goods.

Analysis:
1. The appellant, engaged in manufacturing vehicle equipment and aluminium castings, filed a refund claim for service tax paid on courier agency service used for exporting goods. The Lower Adjudicating Authority partially rejected the claim due to lack of proof of realization of export proceeds for samples and documents.

2. The appellant appealed against the rejection, arguing that the intention of Notification No. 41/2007 was to provide relief to exporters for taxes on services used in relation to export of goods. They contended that the denial of refund was against the government's aim to promote exports by neutralizing taxes borne by exporters.

3. During the hearing, the appellant's representative highlighted that the notification did not specify a condition for producing sale proceeds for export of services. The issue at hand was whether the appellant was entitled to the rejected refund amount.

4. The Commissioner examined the case records and submissions. It was noted that the appellant had complied with the conditions of the notification, filed the claim on time, and had not availed any drawback on the service tax paid. The appellant, being a "One star Export house," had committed to producing a Bank realization certificate for foreign exchange realization.

5. The Commissioner found that the notification exempted courier services used for exporting goods and required specific documentation for claiming a refund. The condition of realization of export proceeds applied only to goods, not documents or samples. The appellant had provided sufficient proof of using courier services for export, and the rejection of the refund amount for samples and documents was deemed incorrect.

6. Consequently, the Commissioner set aside the Lower Adjudicating Authority's decision to reject the refund amount for samples and documents and allowed the appeal, directing the Authority to sanction the refund as per law.

Judgment Summary:
The Commissioner allowed the appeal filed by the appellant, M/s. Sundaram Clayton Limited, against the rejection of a refund claim for service tax paid on courier agency services used for exporting goods. The Commissioner held that the denial of the refund amount for samples and documents was not in line with the conditions of Notification No. 41/2007. The appellant had provided adequate proof of utilizing courier services for export, and therefore, the rejection was overturned, and the refund was directed to be sanctioned.