2018 (7) TMI 784 - AT - Service Tax

Refund of Service tax paid - GTA Services - rejection on the ground that the appellant fall under the scope of Clause 3(b) of said Notification - Held that - This issue has been considered by the Tribunal in the Bharat Heavy Electrical Ltd s case 2017 (4) TMI 700 - CESTAT NEW DELHI , where it was held that It is not in dispute that the service tax was paid by the appellant and such services have been used for export of the goods by the appellant, the rebate is required to be paid to the appellants - refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Refund claim for service tax paid on GTA services used for export under Notification No. 41/2012-ST dated 29/06/2012 as amended - Interpretation of Clause 3(b) of the Notification - Eligibility for refund under the notification.

Analysis:

Issue 1: Refund Claim for Service Tax on GTA Services
The appellant, a manufacturer/merchant importer of bauxite, filed a refund claim for service tax paid on specified services used for export. The claim was denied based on Clause 3(b) of Notification No. 41/2012, as the appellant was deemed liable to pay service tax under Section 68 of the Finance Act, 1994, for receiving GTA services. The appellant contended that they were eligible for the refund as they had paid service tax as the recipient of the service and cited a Tribunal judgment in a similar case.

Issue 2: Interpretation of Clause 3(b) of the Notification
The appellant argued that there was an erroneous interpretation of Clause 3(b) of Notification No. 41/2012, stating that they were required to pay service tax as the recipient of the service, thus falling outside the scope of the clause. The Tribunal analyzed the notification and previous Supreme Court decisions, emphasizing that the purpose of the notification was to grant a refund of service tax on services used for export. A strict interpretation of Clause 3(b) would defeat this purpose and render the notification useless in reverse charge cases.

Issue 3: Eligibility for Refund under the Notification
After considering the arguments and the purpose of the notification, the Tribunal held that the appellant, who had exported goods and used services for the same, should be eligible for the refund under Notification No. 41/2012-ST. The Tribunal set aside the lower order, allowing the appeals and granting consequential relief as per law.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing the need to interpret the notification to achieve its intended purpose of granting refunds for services used in exports. The judgment highlighted the importance of not depriving entitled parties of benefits based on narrow interpretations, ensuring that the notification serves its purpose effectively.