2015 (11) TMI 527 - AT - Service Tax

Denial of refund claim - services used in the export goods under Notification No.41/2007-ST and Notification No.17/2009-ST - Commission paid to overseas export commission agent and Banking & Financial services - Bar of limitation - Held that - As regard nexus of commission service with the export I am of the view that the service is of overseas commission agent who provides services exclusively related to export of goods, therefore even by stretch of imagination it cannot be said that overseas commission agent s service is used for the purpose other than for export. As regard the rejection of refund claim of ₹ 16,17,016/- on the ground of time bar I have observed that the Appellants have admittedly filed the refund claim on 31/03/2010 i.e., after the issuance of Notification No. 17/2009-ST, therefore the refund claim deemed to have been submitted under Notification No. 17/2009-ST - Commissioner (appeals) gravely erred, firstly mentioning that the application was filed before 07/07/2009 which is factually incorrect and secondly when refund claim was admittedly filed on 31/03/2010, it was wrong on the part of Commissioner to hold that the Appellants have filed refund claim under the previous notification no.41/2007-ST and for this reason benefit of public notice No.07/2010 dated 04/03/2010 was not extended to the Appellant. In view of my above observations, I am of the view that the Appellants are legally entitled for the refund as claimed before this Tribunal. However, it appears that both the lower authorities have not carefully verified the above discussed facts therefore committed serious error in rejecting the refund of ₹ 9,81,612/- and ₹ 16,17,016 - Impugned order is set aside - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
1. Rejection of refund of service tax paid on services used in export goods under specific notifications.
2. Grounds for rejection: Availment of drawback, time bar for filing refund claim, and lack of nexus between services and exports.

Analysis:
1. The appeals were against the rejection of refund of service tax paid on services used in export goods under Notification No.41/2007-ST and Notification No.17/2009-ST. The Commissioner rejected the appeals citing reasons related to drawback availment, time bar for filing refund claims, and lack of nexus between services and exports.

2. The Appellant's refunds for commission paid to overseas export commission agent and Banking & Financial services were rejected due to availing drawback facility, filing refund claims beyond the stipulated time, and lack of nexus between the services and exports. The Appellant argued that the condition related to drawback was omitted in the notification post-amendment, making the refund admissible for the period after the amendment date.

3. The Appellant contended that the refund claim was filed within the stipulated time period as per the relevant notification. They also provided evidence establishing the nexus between commission agent services and export goods. The rejection of the refund claim for another amount was challenged based on the incorrect application of the notification dates and conditions by the Commissioner.

4. The Assistant Commissioner reiterated the findings of the impugned order, suggesting a remand for reconsideration due to alleged oversight of relevant factual aspects by the Commissioner and Adjudicating Authority.

5. The Member (Judicial) carefully considered the submissions and observed that the refund claims for the period after the amendment date should not have been rejected for drawback availment. The time bar for filing the refund claims was found to be within the stipulated period, and the nexus between commission services and exports was established. The rejection of another refund claim based on incorrect application of notification dates was also addressed.

6. Consequently, the Member (Judicial) concluded that the Appellants were legally entitled to the refunds claimed. However, due to the lower authorities' failure to consider crucial factual aspects, a remand was ordered for reconsideration by the original adjudicating authority to pass a fresh order in line with the observations and verifications made.