2017 (10) TMI 709 - AT - Service Tax

Refund claim - port services - rejection on the ground that the invoices issued by the Port and Inland Water Transport department, is in the name of CHA and not in the name of the appellant - Held that - there is no dispute about the payment of service tax on port services and their receipt used by the exporter for export of iron ore fines - the appellant has produced on records, the debit notes issued by the CHA to the appellant and its co-relation with the service tax paid through invoice issued by Port and Inland Water Transport department. In the impugned order, the Commissioner has not given any findings with regard to this co-relation - matter is remanded to the original authority who will consider the documents produced by the appellant to establish co-relation between service tax paid by the exporter to the CHA - appeal allowed by way of remand.

Summary

Issues:
Appeal against order allowing refund of cess but rejecting refund of service tax on port services.

Analysis:
The appellant, engaged in iron ore export, sought refund of service tax on input services used for export. The Commissioner allowed refund of certain services but rejected refund of service tax on port services. The appellant argued that their agent, the CHA, paid service tax to the port, providing evidence of payment correlation. The appellant cited various precedents supporting refund despite procedural issues. The appellant also claimed interest on delayed refund. The AR contended that without proper documents, the refund was rightly denied. However, the Tribunal found no dispute on service tax payment for port services and the CHA's role as an agent. The Tribunal noted the lack of findings on the payment correlation in the impugned order. Thus, the Tribunal set aside the order, remanding the case for reconsideration. The original authority was directed to examine the evidence provided, establish payment correlation, and decide on the refund claim within two months, following principles of natural justice.

This judgment highlights the importance of establishing a clear payment correlation for refund claims, even in the presence of procedural issues. It emphasizes the role of agents in service tax payments and the need for authorities to consider all evidence before denying refunds. The decision also underscores the right to claim interest on delayed refunds and the requirement for authorities to follow principles of natural justice in deciding such matters.