2014 (8) TMI 232 - AT - Service Tax

Denial of refund claim - transportation of export goods - Jurisdictional Asstt.Commissioner had initially sanctioned the refund claims but subsequently, the Commissioner exercising his powers under Section 84 had reviewed the Asstt . Commissioner s order holding that refund claims have been wrongly sanctioned under notification no.41/07-ST - lack of evidence to prove that service provider had paid the service tax in respect of the service of transportation of the goods from ICD to the gateway port under Section 65(105)( zzzp ) - Held that - while the appellant had received services in question from M/s. KNPL which included transportation of the goods by rail from the ICD, to the gateway port and the customs clearance of the goods at the ICD as well as at the gateway port for export, there is no document showing that service tax in respect of these services had been paid. We, therefore, hold that there is no infirmity in the Commissioner s order-in-review - Decided against assessee.

Summary

Issues:
Refund claims under notification no.41/07-ST for service tax paid on transportation of export goods in containers by rail; Review of refund sanction orders by Commissioner under Section 84 of Finance Act, 1994; Recovery of erroneously sanctioned refunds; Appeals against Commissioner's review order and Asstt. Commissioner's recovery orders; Dismissal of appeals by Commissioner (Appeals) and confirmation of recovery orders.

Detailed Analysis:

1. Refund Claims under Notification no.41/07-ST:
The appellants, manufacturers of Automative Steel Wheels and Rims, filed refund claims for service tax paid on transportation of export goods by rail. The Asstt. Commissioner initially sanctioned the refund claims, but the Commissioner reviewed these orders and held that the refunds were erroneously sanctioned as there was no evidence of service tax payment. The issue revolved around the eligibility of the services for refund under Section 65(105)(zzzp) of the Finance Act, 1994.

2. Review and Recovery Orders:
Following the Commissioner's review, the Department directed the appellants to pay back the amounts sanctioned as refunds. As the appellants did not comply, show cause notices for recovery were issued. The Asstt. Commissioner confirmed the recovery orders, leading to appeals before the Commissioner (Appeals). The Commissioner (Appeals) dismissed the appeals and upheld the recovery orders, resulting in further appeals by the appellants.

3. Arguments and Defense:
The appellant's counsel argued that the services provided were eligible for refund under the notification, emphasizing that service tax had been paid. On the other hand, the Departmental Representative defended the orders by supporting the findings of the Commissioner and Commissioner (Appeals).

4. Judgment and Dismissal of Appeals:
After considering both sides' submissions and examining the records, it was established that there was no evidence of service tax payment for the transportation services provided. The Commissioner's order-in-review and the Commissioner (Appeals) decision were upheld, leading to the dismissal of the appeals. The lack of documentation proving service tax payment rendered the refund claims unsustainable.

This comprehensive analysis highlights the key issues surrounding the legal judgment, focusing on the refund claims, review and recovery orders, arguments presented, and the final decision leading to the dismissal of the appeals.