2018 (1) TMI 1092 - AT - Service Tax

N/N. 18/2009-ST dated 7.7.2009 - services used for export of goods - denial on the ground that the conditions appended to the said notification have not been complied with by the appellant - Held that - N/N. 18/2009-ST dated 7.7.2009 was issued with the objective of exempting taxable services used for export of the goods. Once the assessee satisfies the department that the goods were in fact exported and the taxable services were used/utilized for such exportation, the substantive part of the notification is considered to be satisfied and in such eventuality, the other conditions laid down in the notification should be construed as mere procedural in nature - Tribunal in the case of M/s Radiant Textiles Ltd. 2016 (10) TMI 242 - CESTAT CHANDIGARH has held that the appellant has not produced adequate documents/records to demonstrate entitlement of the benefit of notification dated 7.7.2009. Since, the responsibility entirely lies with the appellant to prove that the goods were in fact exported by utilising the taxable services, it has to produce adequate documents, which I find were not produced at the time of adjudication of the matter - the matter needs reexamination. Appeal allowed by way of remand.

Summary

Issues: Denial of exemption under Notification No.18/2009-ST dated 7.7.2009 due to non-compliance with conditions.

The judgment revolves around the denial of exemption under Notification No.18/2009-ST dated 7.7.2009 to the appellant. The appellant's claim for exemption was rejected by the authorities below citing non-compliance with the conditions specified in the said notification. The appellant argued that although the return was filed belatedly, it should not be the sole reason for denying the exemption, referring to precedents like M/s Praj Industries Ltd. and M/s Radiant Textiles Ltd. The Revenue, on the other hand, reiterated the non-compliance of conditions and lack of relevant documents supporting the appellant's entitlement to the exemption.

The Tribunal analyzed Notification No.18/2009-ST dated 7.7.2009, aimed at exempting taxable services used for exporting goods. It emphasized that once the appellant demonstrates the actual export of goods and the utilization of taxable services for such exportation, the substantive part of the notification is satisfied. Referring to previous decisions, the Tribunal held that non-compliance with procedural conditions should not dilute substantive compliance, thereby entitling the appellant to the benefit of exemption. However, it noted that the appellant failed to produce sufficient documents during adjudication to prove entitlement to the notification's benefits.

The responsibility to prove the export of goods using taxable services lies with the appellant. As the necessary documents were not provided during adjudication, the Tribunal decided to remand the matter back to the original authority for verification. The appellant was directed to demonstrate that the goods were indeed exported using the disputed taxable services. If such proof is furnished, the benefit of the notification should be extended without strict adherence to procedural conditions, ensuring a fresh decision with an opportunity for a personal hearing.

In conclusion, the appeal was allowed by remanding the case to the original authority for further verification and consideration in light of the Tribunal's observations regarding substantive compliance with the notification's requirements.