2017 (5) TMI 1458 - AT - Service Tax

Refund claim - denial on the ground that debit notes are not valid documents in terms of Rule 4A of STR, 1994 and Rule 9 of CCR, 2004 - Held that - Rule 4A of the STR, 1994 provides the manner of distribution of credit based invoice, bill or challan by the service provider. The said statutory provision also mandates the mode and manner of preparation of such documents. No embargo has been created in the service tax statue for not allowing the refund amount claimed on the basis of debit notes issued by the service provider - the matter should go back to the original authority for verification of the debit notes to be submitted by the appellant - matter on remand. Time limitation - refund denied on the ground that the same was not filed within 60 days from end of the relevant quarter, during which the goods were exported - Held that - Since notification dated 06.10.2007 provides for certain conditions for claiming the exemption, the same are required to be strictly followed/ observed by the tax payer. Thus if the refund claim is filed beyond the period of 60 days, the condition of the notification has not been fulfilled. Accordingly, denial of refund on the ground of limitation by the authorities below is proper and justified. Appeal dismissed - decided against appellant.

Summary

Issues:
Rejection of refund claim for service tax paid on various taxable services under notification no.41/2007-ST dated 06.10.2007. Denial of refund claim based on services not being considered under port service, validity of debit notes, and limitation period for filing refund claim.

Analysis:
1. Refund Claim Rejection: The dispute revolved around the rejection of the refund claim for service tax paid on services like origin documentation, manual documentation, Business Auxiliary Service, Business Support services, express release fees, and B.L. Charges. The authorities denied the refund on the basis that these services were not covered under port service. Additionally, the refund claim was also rejected due to the debit notes not being considered valid documents as per Rule 4A of Service Tax Rules, 1994 and Rule 9 of Cenvat Credit Rules, 2004. Moreover, a part of the refund claim was dismissed on the grounds of being filed beyond the 60-day limitation period from the relevant date.

2. Classification of Services: The appellant argued that despite the classification of services under Business Auxiliary Service or Business Support Service, since these services were provided within the port and facilitated the exportation of goods, they should be considered as port services. Citing previous tribunal decisions, it was highlighted that services provided within the port for exportation purposes have been granted refund benefits under the notification dated 06.10.2007. Following this precedent, the tribunal set aside the impugned order and allowed the appeal for the refund claim related to services used within the port of export.

3. Debit Notes Validity: Rule 4A of the Service Tax Rules, 1994 outlines the requirements for distributing credit based on invoices, bills, or challans by service providers. The tribunal emphasized that if the debit notes issued by the service provider contain all the necessary particulars as per Rule 4A, they should be considered for the refund of the service tax amount indicated. Since the authorities did not assess the contents of the debit notes and the service tax amount involved, the matter was directed back to the original authority for verification. If the debit notes meet the requirements of Rule 4A, the appellant should be entitled to the refund claim.

4. Limitation Period: A portion of the refund claim was rejected due to not being filed within 60 days from the end of the relevant quarter when the goods were exported. The tribunal upheld the denial of the refund on the grounds of the strict conditions outlined in the notification dated 06.10.2007. Failing to adhere to the 60-day filing period meant that the condition of the notification was not met, justifying the denial of the refund claim based on limitation.

In conclusion, the tribunal disposed of the appeal based on the above considerations, emphasizing the classification of services, validity of debit notes, and adherence to the prescribed limitation period for filing refund claims.