2016 (1) TMI 887 - AT - Service Tax

Refund of service tax on services used for export of goods - GTA Services and Port Services. - co-relation of Service Tax paid by the Service providers - Notf No. 41/2007-ST dt 6/10/2007 - Held that - Though the clarification vide Circular No. 120/01/2010-ST dt 19/10/2010 was with respect to Notf No. 5/2006-CE(M.T) but it clearly conveys that in budget 2009 the scheme under Notf No. 41/2007-ST was simplified in Notf No. 17/2009-ST by providing self certification or Chartered Accountant s certification about co-relation and nexus between input Services & the exports. That above logic can be followed for Notf No. 5/2006-CE(MT) where such simplification of Notf No. 17/2009-ST may not be available. As the benefit of CBEC Circular dt 19/10/2010 and relied upon case laws were not available before the adjudicating authority, the matter is remanded back to the Adjudicating authority to decide the matter on the basis of Chartered Accountant s certificate to establish the co-relation required under Notf No. 41/2007-ST - Matter remanded back.

Summary

Issues:
1. Admissibility of refund for Port Services under Notf No. 41/2007-ST.
2. Admissibility of refund for GTA Services under reverse charge mechanism.

Admissibility of refund for Port Services:
The appellant appealed against the rejection of refund for Port Services under Notf No. 41/2007-ST. The first appellate authority upheld the decision, stating the lack of correlation of Service Tax paid by the Service providers as required by the notification. The appellant argued that no specific condition was provided for Port Services in the notification and presented documents to support their claim. However, the Revenue argued that the absence of clear indication on the duty paying document regarding the nature of Services rendered justifies the rejection of the refund claim. The tribunal observed that while the notification did not specify conditions for Port Services, it was essential for the Service tax paid to be related to Port Services under the Finance Act. Since the documents did not clearly indicate this correlation, the rejection of the refund claim was deemed justified.

Admissibility of refund for GTA Services:
Regarding the refund for GTA Services paid under reverse charge, the appellant cited precedents where similar refunds were allowed by the CESTAT. The tribunal referred to a case where the peculiar nature of goods required aggregation at the Port premises before shipping documents were prepared, justifying the correlation of evidence for transport charges and quantity exported. The tribunal also highlighted a CBEC clarification simplifying the refund process through self-certification or Chartered Accountant's certification to establish the required correlation between input Services and exports. As these benefits were not considered by the adjudicating authority, the matter was remanded back for a fresh decision based on the certification to establish the necessary correlation. The appellant's appeal was allowed for the refund of GTA Services, subject to the conditions mentioned in the remand order.

In conclusion, the tribunal upheld the rejection of the refund claim for Port Services due to the lack of clear correlation in the documents. However, the appeal for the refund of GTA Services was allowed for further consideration based on the certification requirements outlined in the CBEC circular. The matter was remanded back to the Adjudicating authority for a fresh decision, emphasizing the importance of establishing the required correlation between Services and exports.