2016 (5) TMI 662 - AT - Service Tax

Eligibility for refund of Service tax - Notification No. 41/2007 - GTA service utilised in respect of export of goods - Appellant contended that it claimed refund after 19-2-2008 when GTA service was included for the purpose refund in Notification No. 41/2007 by amending Notification No. 3/2008-S.T., dated 19-2-2008 and therefore the refund should have been granted - Held that - it is seen that Notification No. 41/2007-S.T. is an exemption notification and the exemption is operationalised by way of granting refund. Thus, the appellant would be eligible for refund of Service Tax paid on GTA service only if the said service was exempt from Service Tax under Notification No. 41/2007-S.T. at the time when the said service was rendered. It is seen that GTA service was rendered during October, 2007 to December, 2007. During the said period, the said service was not eligible for exemption under that notification as it was added in the said notification for the purpose of exemption w.e.f. 19-2-2008 vide amending Notification No. 3/2008-S.T. It is not anybody s case that Notification No. 3/2008-S.T., dated 19-2-2008 has retrospective applicability. Thus, there is no doubt that on the date of rendition of GTA service, the same was not eligible for exemption under Notification No. 41/2007-S.T. Therefore, the question of refund of Service Tax paid on the said service in terms of Notification No. 41/2007-S.T. does not arise. - Decided against the appellant

Summary

Issues: Eligibility for refund under Notification No. 41/2007 for GTA service utilized in the export of goods during October 2007 to December 2007.

Analysis:
1. The appeal was filed against an order disallowing a refund of &8377; 21,59,029 under Notification No. 41/2007 for GTA service used in exporting goods during October-December 2007. The Commissioner (Appeals) denied the refund as the service was not eligible for exemption under the notification during that period.

2. The appellant argued that the refund was claimed after 19-2-2008 when GTA service was included for refund under Notification No. 41/2007 by amending Notification No. 3/2008-S.T. The Departmental Representative contended that the service was utilized before the inclusion date and hence refund cannot be granted.

3. The Tribunal observed that Notification No. 41/2007 is an exemption notification where exemption is granted by way of refund. The appellant would only be eligible for a refund if the GTA service was exempt from Service Tax under the notification at the time of its rendering. Since the service was utilized before the inclusion date of 19-2-2008, it was not eligible for exemption under the notification during October-December 2007.

4. As Notification No. 3/2008-S.T. was not retrospective, the Tribunal concluded that the GTA service was not eligible for exemption under Notification No. 41/2007 during the period in question. Consequently, the appeal was dismissed for lack of merit.

This detailed analysis highlights the key arguments presented by both sides, the interpretation of the relevant notifications, and the Tribunal's reasoning leading to the dismissal of the appeal.