2017 (4) TMI 1175 - AT - Service Tax

Refund claim - input services used in connection with providing the output services to foreign clients - rejection mainly due to non-submission of certain documents and inability of Revenue to identify the taxable nature of the service rendered by the appellant - Held that - the rejection of claims is not substantially on any legal issue. It is mainly on account of non-submission of certain documents or lack of correlation in realization of export proceeds - on the very same set of facts, the Revenue allowed the refund claims for the previous period - the original authority are directed to examine the issues afresh, especially referring to the documents submitted by the appellant with reference to their refund claims - appeal allowed by way of remand.

Summary

Issues:
Refund claims rejection based on non-submission of documents and lack of correlation in realization of export proceeds.

Analysis:
The appeal was filed against the order of the Commissioner (Appeals) Delhi-II rejecting six refund claims covering the period from January, 2008 to June, 2009. The appellants, engaged in providing back-office services to foreign clients, availed cenvat credit on input services but faced rejection of claims due to non-submission of all agreements and invoices indicating the nature of services. The rejection was upheld by the Commissioner (Appeals) citing lack of supporting documents and correlation of foreign exchange receipts with services rendered.

The appellant argued that the claims were rightly eligible for refund as the services were provided under continuing contracts with the same clients. They contended that the rejection was based on technical objections rather than merit, emphasizing that similar refund claims for the previous period were settled without dispute. The appellant also highlighted the absence of a show cause notice before rejection and asserted that all necessary documents were provided.

Upon reviewing the appeal records, the Tribunal noted that the Revenue had previously sanctioned refund claims for the same services. The rejection in the present case was primarily due to non-submission of certain documents and the Revenue's inability to identify the taxable nature of the services. The Tribunal observed that the Commissioner (Appeals) acknowledged the eligibility of credit on input services and found no legal basis for rejecting the claim based on the usage of input services for providing output services.

Concluding that the impugned order was unsustainable, the Tribunal set it aside and directed the original authority to reexamine the issues, specifically referring to the documents submitted by the appellant. The Tribunal emphasized that the nature of services and their exportation were undisputed, requiring verification mainly for quantification and supporting documents. The appellant was granted the opportunity to present their case with supporting evidence before a final decision was made, allowing the appeal by way of remand for further proceedings.