2015 (11) TMI 1419 - AT - Service Tax

Denial of refund claim - Notification No. 17/2009 ST dated 7/7/2009 - Commission Agent Services - Held that - Commissioner(Appeals) has relied upon the Board Circular No. 1320/01/2010 ST dated 19-01-2010, which is squarely applicable in the present case. - As per the said Circular refund otherwise admissible under Rule 5 of Cenvat Credit Rules, 2004. There is no dispute regarding nexus between services and export made by respondent. I therefore do not find any infirmity in the impugned order. - Decided against Revenue.

Summary

Issues Involved:
Refund application under Notification No. 17/2009 ST dated 7/7/2009 for service tax paid towards services used for export of goods. Time limit for refund claim. Interpretation of Board Circular No. 1320/01/2010 ST dated 19-01-2010.

Issue 1: Refund Application under Notification No. 17/2009 ST dated 7/7/2009:
The appeal concerned a refund application filed by the respondent for service tax paid under Notification No. 17/2009 ST dated 7/7/2009 for services used in exporting goods during April, May, and June 2009. The adjudicating authority partially granted the claim, leading to an appeal by the respondent. The Commissioner (Appeals) allowed the appeal, prompting the Revenue to challenge the decision. The key contention was the availability of refund for service tax paid under the reverse mechanism on commission paid to foreign agents, a service recently exempted from tax under Notification No. 18/2009 dated 7-7-09. The Commissioner (Appeals) noted that although commission agent services were not specified in the eligible services for refund under Notification No. 17/2009, the tax payment was undisputed, and the export had occurred. The Commissioner (Appeals) also highlighted the correlation between service provider bills and exporter invoices, emphasizing that the tax was paid for the period before the issuance of Notifications No. 17 & 18 of 2009. Additionally, the Commissioner (Appeals) referenced Board Circular No. 1320/01/2010 ST dated 19-01-2010, which outlined conditions for refund eligibility, including nexus between input services and exported goods/services. The Commissioner (Appeals) concluded that the appellant met all conditions and allowed the appeal, citing the intention to expedite refund claims without procedural obstacles.

Issue 2: Time Limit for Refund Claim:
The Revenue argued that the refund claim was time-barred as it exceeded the six-month limit stipulated in Notification No. 17/2009 ST dated 7/7/2009. Despite multiple hearing dates where the respondent did not appear, the matter was decided on merit. The Revenue contended for the appeal's allowance based on the late filing of the refund claim. However, the Tribunal proceeded to dismiss the Revenue's appeal, emphasizing the absence of any dispute regarding the nexus between services and exports by the respondent. The Tribunal upheld the Commissioner (Appeals)' decision, finding no fault in the order and referencing the Board Circular to support the decision.

Issue 3: Interpretation of Board Circular No. 1320/01/2010 ST dated 19-01-2010:
The Commissioner (Appeals) heavily relied on Board Circular No. 1320/01/2010 ST dated 19-01-2010 in allowing the appeal. The Circular clarified conditions for refund eligibility under Rule 5 of Cenvat Credit Rules, 2004, emphasizing the need for a clear nexus between input services and exported goods/services. The Circular aimed to streamline refund processes and remove procedural hurdles, aligning with the government's intention to expedite refund claims. The Commissioner (Appeals) noted that the appellant satisfied all conditions outlined in the Circular, reinforcing the decision to grant the refund. The Tribunal concurred with the Commissioner (Appeals)' interpretation of the Circular and dismissed the Revenue's appeal, highlighting the absence of any deficiency in the impugned order.

This comprehensive analysis of the judgment delves into the issues surrounding the refund application, time limit for claim submission, and the interpretation of the relevant Board Circular. The decision provides a detailed insight into the legal considerations and reasoning behind the Tribunal's dismissal of the Revenue's appeal and upholding of the Commissioner (Appeals)' decision in favor of the respondent.