2018 (3) TMI 1728 - CGOVT - Service Tax

Rebate of service tax - service tax paid on commission agents services - N/N. 41/2012, dated 29-6-2012 - services used beyond the place of removal - Held that - It is quite evident that the commission agents have not actually provided any service regarding recovery of foreign proceeds from the foreign buyers and their services regarding procurement of the orders was not used beyond factory as envisaged in the definition of specified services. Hence, while it can be an input service for availing Cenvat credit under CCR, 2004, it is not a specified service for getting rebate of service tax under Notification No. 41/2012-S.T. Hence, the rebate of service tax on the commission agents services is not admissible under Notification No. 41/2012-S.T., even in the light of amended definition of specified services with effect from 1-7-2012. The Government does not find any fault in the orders of the Commissioner (Appeals) - the revision applications filed by M/s. Ginni Filaments Ltd., Chhata, Mathura, are rejected.

Summary

Issues:
1. Admissibility of rebate claims for service tax under Notification No. 41/2012.
2. Interpretation of the definition of 'specified services' under the notification.
3. Applicability of amended definition of 'specified services' under Notification No. 41/2012.
4. Determination of service tax rebate eligibility for commission agents' services.
5. Comparison with previous tribunal decisions on rebate of service tax.

Analysis:
1. The revision applications were filed against rejection of rebate claims for service tax under Notification No. 41/2012. The applicant claimed that commission agents' services were eligible for rebate as they were responsible for obtaining export orders and ensuring realization of export proceeds.

2. The lower authorities rejected the rebate claims, stating that services of commission agents were not covered under 'specified services' as defined in the notification, which require services to be used beyond the place of removal. The applicant argued that the amended definition of 'specified services' should include commission agents' services.

3. The Government agreed that the definition of input services and relevant circulars were not applicable for determining rebate admissibility, which should be assessed solely based on Notification No. 41/2012. The applicant contended that the amended definition of 'specified services' retrospectively covered services used beyond factory premises.

4. However, the Government found that commission agents' services, though crucial for obtaining export orders, did not extend beyond the factory as required by the notification. The applicant failed to demonstrate how the agents' responsibility for export proceeds realization qualified as a service used beyond the factory, as per the definition of 'specified services.'

5. The applicant's reliance on tribunal decisions allowing rebate for specific services like transport, handling charges, etc., was deemed irrelevant as those cases involved services used beyond factory premises, unlike the commission agents' services. Ultimately, the Government upheld the rejection of rebate claims by the Commissioner (Appeals), concluding that the commission agents' services did not meet the criteria for rebate under Notification No. 41/2012.