2016 (10) TMI 767 - AT - Service Tax

Rejection of refund claim - terminal handling charges utilized for exporting the product - N/N.41/2007-ST - whether the denial of refund on technical grounds, like the documents produced by the assessee are not carrying the correct registration number, are without pan card number of the service provider, only the debit notes stands produced by the assessee and there is no evidence that service provider has deposited the dues with the revenue, justified? - Held that - N/N. 41/2007-ST dated 06.10.2007 provides exemption to exporters from payment of service tax on the services utilized for export purpose. Said exemption is available by way of refund of service tax originally paid by the exporter. As such the fact which is required to be examined by the authorities below being such refund claim is to be emphasized in the nature of the services have not been utilized for export purpose. As long as the assessee produces the documentary evidence (in whatever shape it may be) and have passed upon such documentary evidence the fact of procurement of services and their utilization in export of the goods is established the refund become due. There is no requirement in the notification to the effect that the assessee must produce the evidence to show that the services provider has deposited the service tax with the Revenue. As long as he has paid the service tax to the service provider along with consideration of the services and as long as the services stand availed by him and utilized in the export of the goods the refund would be allowable. Appeal disposed off - matter remanded to the original Adjudicating Authority for fresh examination of the documents produced by the assessee and to decide upon their refund claim accordingly within a period of three months.

Summary

Issues:
Refusal of refund claim on terminal handling charges for service tax paid due to technical grounds.

Analysis:
The Appellate Tribunal found that terminal handling charges should be considered as port services, making the refund on service tax paid available to the assessee. However, the refund was denied based on technicalities such as incorrect registration number, absence of PAN card number of the service provider, and only debit notes being produced without evidence of revenue dues payment. The advocate clarified that the denial based on debit notes was incorrect, and the registration discrepancy was due to the service provider's centralized registration despite services being provided from branch offices. The absence of a PAN number in the registration certification was also deemed insufficient grounds for denying the service tax refund, especially considering the registration predated the PAN card requirement.

The Tribunal highlighted that notification number 41/2007-ST exempts exporters from paying service tax on services used for export purposes, allowing for a refund of the tax originally paid. It emphasized that the focus should be on whether the services were actually utilized for export, rather than on technicalities. As long as the assessee provides documentary evidence, regardless of its form, demonstrating the procurement and utilization of services in exporting goods, the refund is warranted. The notification does not mandate proof of the service provider depositing service tax with the revenue, as long as the assessee paid the tax to the service provider, availed the services, and used them in exporting goods.

The Tribunal set aside the impugned order and directed a fresh examination of the documents by the original Adjudicating Authority to decide on the refund claim based on the established utilization of services for export. Due to the age of the matter, a prompt resolution within three months was urged to finalize the proceedings efficiently.