2013 (12) TMI 1011 - AT - Service Tax

Denial of refund claim - Taxable services not covered under the registration - Held that - A bare perusal of different expenses clearly throws light that export does not occasion without these expenses being integrated. Therefore, all expenses occasioning the export is contemplation of Circular for abetment. We believe that law does not permit to export taxes. Therefore, all service tax relating to the services connected to export enjoys rebate. This we say following the principles laid down by Larger bench in Western Agencies Pvt. Ltd. reported in 2011 (3) TMI 528 - CESTAT, CHENNAI (LB) - Decided against Revenue.

Summary

Issues:

1. Refund allowed without verification of export connection.

Analysis:

The judgment dealt with the issue of allowing a refund without verifying if the services were connected to export. The Revenue representative argued that the refund should not have been permitted without establishing the export connection. However, the respondent's counsel referred to Circular No. 112/6/2009-S.T., which allowed certain connected services related to export to enjoy a rebate. The Circular specified that taxable services used for export did not require verification of the service provider's registration certificate for granting refunds. The judgment cited Notification No. 41/2007-S.T., which provided exemption through refunds for specified taxable services used in exporting goods. It emphasized that procedural violations by the service provider should be addressed separately from the refund process. The Tribunal examined the expenses outlined in the show cause notice and concluded that all expenses contributing to the export process were eligible for rebate under the Circular. It stated that the law did not allow for export taxes and that all service tax related to export-connected services should enjoy a rebate. The decision was based on the principles established by a Larger Bench in the case of Western Agencies Pvt. Ltd. (2011 (22) S.T.R. 305 (Tri.)). As a result, the Revenue's appeal was dismissed, affirming the refund granted.

This comprehensive analysis of the judgment highlights the key arguments presented by both parties, the relevant legal provisions, and the Tribunal's reasoning based on precedent. The decision underscores the importance of considering the connection to export when granting refunds and clarifies the treatment of taxable services used in the export process.