2015 (12) TMI 154 - AT - Service Tax

Refund claim - exemption Notification No. 41/2007 dated 06.10.2007 as amended by Notification No. 17/2008 dated 01.04.2008 - Held that - Impugned order of the learned Commissioner appears unsustainable. Its only by the amendment introduced by Notification No. 17/2008-ST that services provided by a commission agent located outside India and engaged under a contract or agreement or any other document by an exporter in India, to act on behalf of the exporter, to cause sale of goods exported by such exporter was notified as a scheduled service, comprising the taxable service enumerated in Section 65(105)(zzb), entitled to benefits of exemption and w.e.f. 01.04.2008. The learned appellate Commissioner however, appears to have concluded that since commission agent service was included as part of Business Auxiliary Service w.e.f. 01.07.2003 in Section 65(19) of the Finance Act, 1994, exemption was available for the entire period claimed. - refund Stayed.

Summary

Issues:
Claim for refund based on exemption Notification No. 41/2007 dated 06.10.2007 as amended by Notification No. 17/2008 dated 01.04.2008 was rejected by Deputy Commissioner, Central Excise Jalandhar; Appeal preferred by assessee; Appellate Commissioner, Chandigarh declared that commission paid to overseas commission agents for facilitating export of goods merits sanction.

Analysis:

The judgment deals with a claim for refund amounting to Rs. 10,27,657 submitted by the respondent on 21.07.2009 for the period 27.04.2006 to 26.03.2009, based on exemption Notification No. 41/2007 dated 06.10.2007 as amended by Notification No. 17/2008 dated 01.04.2008. The claim was initially rejected by the Deputy Commissioner, Central Excise Jalandhar, leading the respondent to file an appeal. The impugned order dated 28.01.2013 by the appellate Commissioner, Chandigarh, stated that the commission paid by the appellant to overseas commission agents for facilitating the export of goods deserves sanction, subject to scrutiny and verification, and directed the restoration of the refund claim for disposal in accordance with the law.

The primary issue addressed in the judgment pertains to the sustainability of the impugned order by the learned Commissioner. The amendment introduced by Notification No. 17/2008-ST specifically included services provided by a commission agent located outside India, engaged under a contract by an exporter in India, to act on behalf of the exporter for causing the sale of goods exported, as a scheduled service eligible for exemption from tax, effective from 01.04.2008. However, the appellate Commissioner seemed to have erroneously concluded that since the commission agent service was included in the Business Auxiliary Service from 01.07.2003 under Section 65(19) of the Finance Act, 1994, the exemption was applicable for the entire claimed period.

Consequently, the judgment decided to stay the operation of the impugned order pending the disposal of the appeal, based on the reasons provided in the analysis. This decision was made to ensure a fair and just consideration of the issues raised regarding the eligibility of the refund claim in light of the relevant legal provisions and notifications cited in the case.