2018 (4) TMI 1704 - AT - Central Excise

Refund of Service Tax - input services utilized for export of readymade garments - HELD THAT - On the first ground objection as to jurisdiction have to be taken in the course of the first instance, which was not taken by Revenue before the ld. Commissioner (Appeals) and accordingly, the said ground is dismissed. The ld. Commissioner (Appeals) have only deciding the issue in principle by giving the directions to the respondent/assessee to produce the payment proof in respect of all the concerned invoices to the Adjudicating Authority thus, directions having been given to the respondent/assessee to appear before the Adjudicating Authority and certified certificate regarding receipt of export proceedings in support of their refund claim of export and then they are eligible for disbursement of refund of Service Tax. Thus, the second ground of appeal is not tenable. The respondent/assessee is directed to appear before the Adjudicating Authority in terms of the directions of the ld. Commissioner (Appeals) and produced the relevant proof of realization of export proceedings in support of their refund claim - Appeal dismissed - decided against Revenue.

Summary

Issues:
Refund of Service Tax under Notification No. 42/2001-CE (NT) for readymade garment export - Rejection of refund claim by Adjudicating Authority - Entitlement for refund by Commissioner (Appeals) - Appeal by Revenue challenging jurisdiction and eligibility of refund.

Analysis:
The issue in this case revolves around the refund of Service Tax paid by a manufacturer/exporter of readymade garments. The appellant filed a refund claim under Notification No. 42/2001-CE (NT) for an amount of ?1,30,098/- for Service Tax paid on specified input services used for export between August 2013 to December 2013. The Adjudicating Authority rejected the refund claim partially due to late filing and non-conformity with Notification No. 41/2012-ST, and lack of export proceedings realization proof.

Upon appeal, the Commissioner (Appeals) reviewed sample invoices, export documents, and bank realization statements. The Commissioner found the appellant entitled to a refund, noting that minor discrepancies in invoices did not warrant rejection. The Commissioner observed that the appellant had provided necessary documents like a chart of payments to the service provider and IEC certificate listing all offices. The Commissioner directed the appellant to produce payment proof before the Adjudicating Authority for the refund of ?1,26,932/-.

The Commissioner's decision was based on the principle that the refund should be granted upon production of payment proof/export realization. The Revenue appealed this decision on grounds of jurisdiction and eligibility of the refund under Notification No. 41/2012-ST. The Tribunal dismissed the Revenue's appeal, noting that jurisdictional objections should have been raised earlier and that the Commissioner's directions for proof of export realization were sufficient to determine eligibility for the refund.

Ultimately, the Tribunal upheld the Commissioner's decision, directing the appellant to appear before the Adjudicating Authority with relevant proof of export realization to support their refund claim. The Tribunal emphasized the importance of complying with the Commissioner's directions for the disbursement of the Service Tax refund.

In conclusion, the Tribunal's judgment affirms the entitlement of the manufacturer/exporter to a refund of Service Tax, subject to providing necessary payment proof and export realization documents as directed by the Commissioner (Appeals).