2017 (4) TMI 698 - AT - Service Tax

Refund claim - denial on the ground that appellant has not co-related the payment to the service provider from the bank statement and in the absence of any cheque No., demand draft No., pay order, no co-relation is possible to ascertain the actual date of payment of service tax to the service provider - Held that - there is a co-relation with payment made to service provider and also that claim is within one year of the payment made to the service provider, appellant is eligible for refund of the amount - these documents were enough to come to a conclusion whether the appellant had made any payment to the service provider or not. To that extent both the lower authorities have erred in coming to a conclusion that the refund claim filed by the appellant is not co-relatable with the input services and exports - appeal allowed - decided in favor of appellant.

Summary

Issues involved: Refund of service tax paid to service provider; Co-relation of payment with bank statement for refund claim.

Analysis:
1. Refund of service tax paid to service provider:
The appellant filed an appeal against the Order-in-Appeal regarding the refund of service tax paid to the service provider for various services used in providing output services. The appellant claimed the refund based on Notification No. 17/2011-S.T. dated 1-3-2011. The lower authorities partially allowed the refund claim, stating that the appellant failed to co-relate the payment to the service provider from the bank statement. However, upon review, the Member (J) found that the appellant had indeed made payments to the service provider as evidenced by the bank statement and other documents. The Member concluded that the appellant was eligible for the refund as there was a clear co-relation between the payments made and the services received. Therefore, the impugned order was deemed unsustainable and set aside, allowing the appeal for refund.

2. Co-relation of payment with bank statement for refund claim:
The crucial issue in this case was the co-relation of the payment made by the appellant to the service provider with the bank statement for the refund claim. The lower authorities had rejected the refund claim on the grounds of lack of co-relation between the payment and the service tax paid. However, upon examining the evidence presented by the appellant, the Member (J) found that the bank statement clearly indicated payments made to the service provider, including specific details such as UTR numbers and recipient names. The Member concluded that the lower authorities erred in their decision and that the appellant had provided sufficient evidence to establish the co-relation between the payments and the services received. As a result, the appellant was deemed eligible for the refund, and the impugned order was set aside, allowing the appeal with consequential relief.

In conclusion, the judgment by the Appellate Tribunal CESTAT Mumbai, delivered by Member (J), addressed the issues of refund of service tax paid to the service provider and the co-relation of payment with the bank statement for the refund claim. The decision highlighted the importance of providing sufficient evidence to establish the connection between payments made and services received when claiming a refund. The appellant's appeal was allowed, and the impugned order was set aside, granting the appellant the refund of the service tax amount.