2018 (7) TMI 2015 - AT - Service Tax

Refund claim - export of goods - refund claim was rejected on the ground that, by filing two refund claims, the appellant intend to avail double benefit - HELD THAT - The facts are not in dispute that the goods have been exported for which various input services were used. The appellant filed refund claim only in respect of GTA service though there were other services received by them in connection with export of goods but for those services refund claims could not be filed. However, for left over services, refund claim was subsequently filed. In these facts, only due to reason that appellant filed two different claims instead of one claim, refund could not be rejected. Merely for minor procedural lapse that instead of one claim two claims were filed, the appellants substantial benefit of refund cannot be rejected. Appeal allowed - decided in favor of appellant.

Summary

Issues: Refund claim for services used for export of goods; Rejection of refund claim due to filing two claims instead of one.

In this case, the appellant filed a refund claim for services used in exporting goods, initially for an amount of ?97,389, which was sanctioned. Subsequently, the appellant filed an additional refund claim of ?5,87,348 for various other services inadvertently left out. The refund claim was rejected on the grounds of seeking double benefit by filing two claims instead of one, as required by Notification No. 41/2012-ST dated 29.06.2012. The appellant argued that the services for which the refund was claimed were indeed used for exporting goods, and the denial of refund solely based on filing two claims was unjustified.

Upon hearing both parties, the Tribunal found that the goods were exported using various input services for which the refund claim was initially filed only for GTA service. While other services used in connection with exporting goods were not included in the first claim, a subsequent claim was made for those services. The Tribunal emphasized that the objective of granting refunds is to ensure that the burden of service tax on services used for exporting goods does not get exported, and the taxes and duties are not passed on. Despite the procedural error of filing two claims instead of one, the Tribunal held that denying the refund solely on this ground would be unfair as the services were indeed used for exporting goods and were subject to service tax. Therefore, the Tribunal set aside the impugned order and allowed the appeal, emphasizing that the substantial benefit of the refund should not be rejected due to a minor procedural lapse.

In conclusion, the Tribunal's decision highlights the importance of ensuring that services used for exporting goods are not burdened with taxes and duties, and that procedural errors should not overshadow the legitimate entitlement to refunds for such services.