2015 (9) TMI 212 - AT - Service Tax

Denial of refund claim - Refund in respect of outward transportation - refund not claimed in respect of inward transportation - Held that - assessee s act of not claiming refund in respect of inward transportation is not relevant to determine the eligibility for refund of tax paid on outward transportation. Show-cause notice issued had no merits and both the orders passed on that basis also have no merit.

Summary

Issues:
1. Applicability of service tax on GTA services for inward and outward transportation.
2. Availment of benefit of abatement under Notification No. 13/2008-ST.
3. Rejection of refund claim based on not claiming refund for inward transportation.
4. Eligibility for refund of service tax paid on outward transportation.

Analysis:

1. The appellant, a manufacturer of tower parts, paid service tax on GTA services received for both inward and outward transportation during a specific period. They paid tax at the rate of 12.36% without utilizing the 75% abatement available under Notification No. 13/2008-ST. A refund claim was filed by the appellant after being advised by the audit party to reverse the credit claimed on outward transportation due to not availing the abatement. The issue revolved around the eligibility of the appellant for refund concerning the tax paid on outward transportation.

2. A show cause notice was issued to the appellant proposing to reject the refund claim on the basis that they did not claim a refund for the excess tax paid on inward transportation. The authorities upheld this stance, stating that since the appellant did not seek a refund for tax paid on inward transportation, they could not claim a refund for tax paid on outward transportation. The appellant argued that they were entitled to credit for inward transportation and hence did not need to file a refund claim for it. They contended that the decision to claim a refund should be at their discretion.

3. The Tribunal agreed with the appellant's counsel, emphasizing that the rejection of the refund claim solely based on not claiming a refund for inward transportation was unjustified. The Tribunal found no connection between the appellant's decision regarding inward transportation and the eligibility for a refund on outward transportation. The show cause notice lacked merit, and the subsequent orders upholding it were deemed baseless. Consequently, the Tribunal allowed the appeal, providing any necessary consequential relief to the appellant.

This detailed analysis highlights the key legal issues, arguments presented, and the Tribunal's decision, ensuring a comprehensive understanding of the judgment.