2016 (8) TMI 945 - AT - Service Tax

Rejection of rebate claims delay in filing declaration to claim rebate business auxiliary service - Rule 5 of Export of Service Rules, 2005 - notification No. 12/05-ST dated 11.4.05 Held that - mere late filing of declaration where the Government can verify it subsequently, cannot be a ground adopted for denial of the substantive benefit, if otherwise available to the assessee. Here, refund was rejected on preliminary ground itself, the documents were not examined and claim was not otherwise verified matter remanded to original adjudicating authority for verification of appellant s claim of rebate appeal disposed off - decided in favor of appellant.

Summary

Issues:
Delay in filing declaration for rebate of service tax on export of Business Auxiliary services.

Analysis:
The appellants were engaged in exporting Business Auxiliary services and were entitled to a rebate of service tax paid on various services as per Rule 5 of Export of Service Rules, 2005. The issue arose when there was a delay in filing the required declaration prior to export, leading the Revenue to reject the rebate claims based on this ground. The Commissioner (Appeals) noted the delay in filing the declaration and observed that repeated and purposeful omission in filing the declaration cannot be condoned, emphasizing the importance of timely compliance with the notification requirements. However, it was pointed out that out of 15 refund claims by the same assessee, delays were present only in three cases, indicating that the observation of repeated delay by the appellate authority was factually incorrect.

The Tribunal referred to a previous decision in the case of Commissioner of Service Tax Delhi vs. Convergys India (P) Ltd., where it was held that the non-observance of a procedural condition for rebate of credit on input services, such as late filing of declaration, should not be used to deny the substantive concession. The Tribunal emphasized the technical nature of the procedural lapse and the need for a liberal view in export-related matters. Therefore, the Tribunal concluded that a mere delay in filing the declaration, which can be verified subsequently by the Government, should not be a valid ground for denying the substantive benefit available to the assessee.

Considering the arguments and precedents, the Tribunal set aside the impugned orders and remanded the matter to the original adjudicating authority for verification of the appellants' claims of rebate. The decision highlighted the importance of examining the documents and verifying the claims before rejecting them on preliminary grounds. Ultimately, both appeals were disposed of in favor of the appellants, emphasizing the need for a thorough verification process before denying rebate claims based on procedural lapses.