2017 (6) TMI 222 - AT - Service Tax

Refund of service tax - drawback on export items - N/N. 41/2007-ST dated 6.10.2017 and 17/2009-ST dated 07.07.2009 - Held that - the services, received by the exporter on which service tax has been paid, are relatable to the activities within the port, are to be considered for sanction of refund - in the appellant s own case M/s. Shree Rajasthan Syntex Ltd. Versus C.C.E. Jaipur 2017 (5) TMI 1459 - CESTAT NEW DELHI , the Tribunal held that they are eligible for refund of service tax in respect of terminal handling charges, CHA services, banking charges and also for tax paid using cenvat credit. In respect of rejection of claim due to lack of supporting evidences with reference to GTA services, sales or purchase of foreign exchange, banking charges, it is seen that the appellants are pleading that they have complete supporting evidences, which can categorically link-up with availment of service, payment of service tax with the shipment of cargo by them. This requires verification by the sanctioning authority. Appeal allowed by way of remand.

Summary

Issues:
Eligibility of the appellant for refund of service tax in relation to services availed during the export of goods under specific notifications.

Analysis:
The appeals revolve around the eligibility of the appellant for a service tax refund concerning services utilized during the export of goods as per Notification no.41/2007-ST and 17/2009-ST. The appellant, engaged in yarn manufacturing and export, filed refund claims during the relevant period. The Original Authority rejected significant amounts of the claims, which were later partially upheld on appeal, reducing the rejected amount in the second appeal.

The primary contention of the appellant is that they should be eligible for a refund claim post 7.12.2008, following an amendment to the notification that removed the bar on refunds when drawback was claimed. The rejection by lower authorities was based on various grounds, including the non-admissibility of port services/THC, lack of evidence for service tax payments, and absence of supporting documents for certain services like banking charges and purchase/sale of foreign exchange. The rejection of claims related to "Business Auxiliary Service" and GTA services was also noted.

Upon hearing both sides and examining the records, it was established that the appellant was not eligible for a refund before 7.12.2008 due to the drawback claim. However, for the period post the mentioned date, the rejection was based on different grounds. Notably, services within the port area related to export activities were deemed eligible for a refund, as established in a previous Tribunal order. The Tribunal held that services like terminal handling charges, CHA services, banking charges, and tax paid using cenvat credit were refundable.

The Tribunal emphasized the need for verification of documents regarding payment of service tax on banking charges and recognized the appellant's eligibility for service tax payment from the cenvat account. The rejection of claims due to lack of supporting evidence for GTA services, foreign exchange transactions, and banking charges was deemed reversible upon submission of adequate evidence linking these services to cargo shipment. Consequently, the impugned orders were set aside, and the cases were remanded to the Original Authority for a fresh decision considering all supporting evidence provided by the appellant in line with Tribunal decisions on the issue. The appellant was granted an opportunity to submit all relevant evidence, and the appeals were allowed by way of remand.