2015 (12) TMI 21 - AT - Service Tax

Refund claim - whether the appellants herein are eligible for the refund of education cess paid on the service tax in respect of port related services technical testing and analyzing services - Held that - first appellate authority set aside the order-in-original which granted refund to the appellant by relying on the judgement of the Tribunal in the case of Balasore Alloys Ltd. (2010 (7) TMI 327 - CESTAT, KOLKATA ) which is in favour of the Revenue. We find that the first appellate authority has not considered the subsequent judgements passed by the Tribunal in the case of Cauvery Coffee Traders 2012 (8) TMI 374 - CESTAT, BANGALORE and Kudremukh Iron Ore Co. Ltd. (2011 (12) TMI 131 - CESTAT, BANGALORE). It is also to be noted that the CBEC Circular No. 134/3/2011 dated 08.04.2011 was issued specifically noting the judgement of the Tribunal in the case of Balasore Alloys Ltd. (supra) and the Boards view is if that education cess paid on the service tax by the service providers is also to be refunded to appellants. We find that the ratio of the judgement of the Tribunal in the case of Cauvery Coffee Traders and Kudremukh Iron Ore Co. Ltd. (supra) is the correct view as if the service tax liability is discharged on which education cess is paid on the goods exported, the benefit of refund of such education cess paid should not be denied when the export of goods is not in dispute. - all appellants are eligible for refund of education cess paid on the service tax by the service providers. - Decided in favour of assessee.

Summary

Issues:
Refund eligibility of education cess paid on service tax for port related and technical testing services.

Analysis:
The appeals were filed against Order-in-Appeal No.21 to 46/2011, raising the common issue of refund eligibility. The first appellate authority held that the appellants were entitled to the refund of service tax but not the education cess paid on the service tax. This decision was based on Notification No.41/2007-ST, which specified refund for service tax only. The authority referred to the Tribunal's decision in Balasore Alloys Ltd. 2010 (20) STR 506 (Tri. Kolkata).

The appellants argued that Circular No.134/3/2011-ST clarified by the Central Board of Excise and Customs (CBEC) allowed for the refund of education cess along with service tax. They cited the Tribunal's decisions in the cases of Cauvery Coffee Traders and CCE Mangalore vs. Kudremukh Iron Ore Co. Ltd. to support their claim for refund.

The Departmental Representative (D.R.) supported the first appellate authority's findings. However, upon review, the Tribunal noted that the authority did not consider the subsequent judgments in favor of refund eligibility, such as those in the cases of Cauvery Coffee Traders and Kudremukh Iron Ore Co. Ltd. The Tribunal also highlighted that CBEC Circular No. 134/3/2011 specified the refund of education cess paid on service tax. The Tribunal concluded that if service tax liability is discharged, the benefit of refund for education cess should not be denied when the export of goods is not in dispute.

Therefore, the Tribunal ruled in favor of the appellants, stating that they are eligible for the refund of education cess paid on the service tax by the service providers. Consequently, all appeals were allowed with consequential relief.