2018 (2) TMI 1446 - AT - Service Tax

Refund of service tax paid - input services - gardening services - Held that - in the permission granted by the Pollution control Board to appellant, there is no clause which requires the appellant to maintain a green belt of approximately 33% of the area for which they have sought permission for construction of Research and Development facility - refund allowed. Fencing of the land leased out by the appellant - Held that - the lower authorities were correct in coming to a conclusion that these services which were rendered by the service providers could not be correlated with the export of services of the appellant - Before the Tribunal also they are unable to correlate the said services rendered with export services from the appellant s premises - refund cannot be allowed. Appeal allowed in part.

Summary

Issues:
Refund claim rejection of service tax paid for gardening services and fencing services.

Gardening Services Refund Claim:
The appellant, an exporter of services, claimed a refund of service tax paid for maintaining a garden in their research area to comply with Pollution Control Board requirements. The appellant also claimed a refund for service tax paid on erecting barbed wire fences for conducting trials on leased land. The Departmental Representative argued that maintaining a green belt was mandatory to comply with regulations and cited a Tribunal decision supporting the refund claim. The A.R. countered, citing Tribunal decisions on business expenses and lack of correlation for the fencing services. The Tribunal found in favor of the appellant for the gardening services refund, noting the absence of a green belt maintenance requirement in the permission granted by the Pollution Control Board. The Tribunal set aside the rejection of the refund claim for gardening services but upheld the rejection for fencing services due to the lack of correlation with the appellant's exported services.

Conclusion:
The appeal was partly allowed for the gardening services refund claim but rejected for the fencing services refund claim. The Tribunal's decision was based on the lack of a green belt maintenance mandate in the permission granted and the inability to establish a correlation between the fencing services and the exported services.