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2016 (7) TMI 1152 - AT - Service TaxClaim of refund - services used for export of goods - Notification No. 41/2007-ST dated 6.10.2007 - Refund was rejected on the ground that the appellant had availed drawback in respect of goods exported under Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 - Held that - the analysis and conclusion drawn on this issue in terms of para 2 (reproduced above) of the judgement of CESTAT in the case of Bharat Art and Crafts 2016 (4) TMI 197 - CESTAT NEW DELHI remain valid and there is nothing in the pleadings/contentions of the appellant which in any way adversely affects the efficacy of the said analysis. Thus the exemption Notification No. 41/2007-ST is rendered inapplicable in the case of such exports where the appellant claimed drawback under the Drawback Rules. - Decided against the assessee.
Issues:
Refund claim rejection based on drawback availed and charges not covered under specified services under Notification No. 41/2007-ST. Analysis: The appeal challenged the rejection of a refund claim amounting to ?11,18,403/- filed under Notification No. 41/2007-ST. The rejection was due to the appellant availing drawback for goods exported and charges paid for services not falling under specified services. The appellant contended that the refund for terminal handling charges, transportation of empty containers, and charges by Customs House Agent (CHA) should be allowed. The appellant cited precedents where refunds for similar charges were permitted by CESTAT, emphasizing that only service tax on agency charges was claimed for refund. The appellant argued that the Drawback Rules allow for refunds of service tax paid on taxable services used as input services in manufacturing export goods, even if drawback was claimed. The appellant highlighted the omission of Condition No. 1(e) from the notification, indicating the intention to refund such services despite drawback claims. Regarding the charges, the appellant clarified that only service tax on agency charges was claimed, which fell under specified services. The appellant referenced CESTAT judgments supporting the refund of similar charges, emphasizing that the other charges were an integral part of CHA services. The appellant relied on a tribunal decision to support the admissibility of the refund for service tax on agency charges. The appellant argued that the exports made under drawback claims should not hinder the refund eligibility, as the Drawback Rules consider service tax paid on input services for export goods. The respondent contended that the issue was settled against the appellant in a previous case. The tribunal analyzed the contentions of both sides and referred to previous judgments where refunds for terminal handling charges and transportation of empty containers were allowed. The tribunal noted that the appellant explicitly stated that only service tax on agency charges was claimed for refund, which was covered under specified services. The tribunal upheld that the appellant's claims were admissible under the specified services and previous tribunal decisions. The tribunal addressed the issue of exports made under drawback claims, citing Condition No. 1(e) of Notification No. 41/2007-ST. Referring to a previous case, the tribunal emphasized that the Drawback Rules consider the tax paid on input services for export goods, and the notification's proviso indicated that goods exported under drawback claims were not eligible for refunds. The tribunal highlighted that the exemption notification was not applicable to exports where drawback was claimed, as per the legal interpretation. The tribunal dismissed the appeal, affirming the rejection of the refund claim based on exports made under drawback claims. In conclusion, the tribunal upheld the rejection of the refund claim, emphasizing the inapplicability of the exemption notification to exports made under drawback claims. The analysis reaffirmed the legal position regarding refunds for services used as input for export goods and the impact of drawback claims on refund eligibility. The tribunal's decision was based on legal interpretations and precedents, leading to the dismissal of the appeal.
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