2018 (4) TMI 666 - AT - Service Tax

Refund claim - service tax erroneously paid - denial on the ground of mentioning the commission amount on the shipping bill or in the bill of export - procedure stated under N/N. 18/2009-ST dated 07/07/2009 - Held that - Hon ble High Court of Gujarat in a similar situation in the case of Commissioner of Central Excise& Customs, Swat -1 V. ABG Shipyard Ltd 2013 (9) TMI 741 - GUJARAT HIGH COURT had clearly ruled that non declaration of the commission amount on the shipping bill is a procedural lapse, when the amount of commission paid is not disputed and the service tax liability on that is also discharged - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Appeal against rejection of refund claim under Notification No. 18/2009-ST dated 07/07/2009.
2. Compliance with procedural requirements for availing exemption.
3. Unjust enrichment considerations in the refund claim.

Analysis:

Issue 1:
The appeal was filed by Revenue against the rejection of the refund claim under Notification No. 18/2009-ST dated 07/07/2009. The respondent, an exporter, had paid commission to a person outside India and discharged service tax liability under reverse charge mechanism. Subsequently, realizing eligibility for exemption, they applied for a refund of the erroneously paid service tax.

Issue 2:
The main contention revolved around the procedural compliance required for availing the exemption under the said notification. The lower authorities rejected the refund claim due to the failure of the exporter to declare the commission amount on the shipping bill, as mandated by the notification. The appellate authority, however, acknowledged that the substantive conditions for exemption were met, emphasizing that procedural lapses should not override substantive benefits. Various judgments were cited to support this stance, highlighting the importance of liberal interpretation in cases of technical lapses to uphold the purpose of incentive schemes.

Issue 3:
Regarding unjust enrichment considerations, it was argued that such provisions do not apply to export of goods and services. Citing precedents, it was established that in cases of export, the bar of unjust enrichment should not hinder refund claims. The appellate authority disagreed with the adjudicating authority's stance on unjust enrichment, emphasizing that the refund claim was eligible based on the circumstances of the case and relevant legal principles.

In conclusion, the appellate tribunal upheld the first appellate authority's decision, rejecting the Revenue's appeal. The tribunal emphasized the importance of substantive compliance over procedural lapses in availing statutory benefits and highlighted that unjust enrichment principles should not impede refund claims in export-related matters. The judgment provided a comprehensive analysis of the issues involved, citing relevant legal precedents to support the decision.