2016 (10) TMI 875 - AT - Service Tax

Rejection of refund claim - classification of service in dispute - export of DOC - loading / unloading of wagons and supervision of wagons etc - whether the allowing of refund on the ground that the service falls under the category of technical testing and analysis services is incorrect and need to be reversed? - Held that - Revenue is assailing the orders of the authorities below on the ground that the activity and service provided by the service provider are not covered by the definition of technical testing and analysis services. However, they have accepted that the service tax was paid under the said category and there is no reopening of the classification at the end of service provider. Without going into the said aspect as to whether the activities fall under the category of technical testing and analysis services, we agree with the views of the lower authorities that the classification adopted at the end of service provider, cannot be re-opened at the service recipients end. If service tax stand paid under the category of technical testing and analysis services and the Revenue has not raised any objection at the time of acceptance of the service tax, no such objection can be raised at the end of service recipient, at the time of grant of refund. Reliance placed on the decision of COMMISSIONER OF C. EX., LUDHIANA Versus PAWAN ISPAT UDYOG 2007 (1) TMI 399 - CESTAT, NEW DELHI . Refund allowed - appeal disposed off - decided against Revenue.

Summary

Issues:
1. Appeal against rejection of refund claim for service tax paid on specified services.
2. Interpretation of technical testing and analysis services for refund eligibility.

Analysis:
1. The case involved an appeal by the Revenue against the rejection of their appeal by the Commissioner (Appeals) regarding the refund claim of service tax paid on specified services for export. The respondent had filed a refund claim in accordance with relevant notifications. The adjudicating authority sanctioned the refund claim after scrutinizing it and finding that the service tax paid fell under the category of technical testing and analysis services as per the specified notifications.

2. The Revenue contested this decision, arguing that the services provided did not fall under the definition of technical testing and analysis services. However, the Commissioner (Appeals) upheld the refund, emphasizing that the Revenue had not disputed the classification of the services at the time of collection of service tax. The Commissioner held that any objection to the classification should have been raised earlier, and it was not appropriate to challenge it at the refund stage. The Commissioner also noted that any dispute regarding the classification should have been addressed with the service provider directly.

3. Upon review, the Appellate Tribunal found that the Revenue had accepted the payment of service tax under the category of technical testing and analysis services without contesting it initially. The Tribunal agreed with the lower authorities that once the service tax was paid and accepted under a specific category, the classification could not be revisited at the recipient's end during the refund process. The Tribunal cited relevant case law to support this position and concluded that there was no valid reason to overturn the decisions of the lower authorities. Therefore, the appeal filed by the Revenue was rejected.