2019 (5) TMI 1290 - AT - Service Tax

Rebate Claim/refund of service tax - export of goods - para 3 of Notification No.41/2012-ST, dated 29.06.2012 - services availed beyond the place of removal - HELD THAT - The words beyond the place of removal has been deleted and instead by the amendment notification the definition of specified services is defined to mean as the taxable services that have been used beyond factory or any other place or premises of production or manufacture of the said goods for their export . Thus when the taxable services have been used beyond factory or beyond any other place, the same would be eligible for rebate/refund. The interpretations of the authorities below that these services are input services and, therefore, when such services are used beyond the place of removal, they are not eligible for credit is misconceived. The definition of input services as given in Cenvat Credit Rules lay down the law with regard to eligibility of credit. When separate definition is given in notification with regard to the specified services for which refund can be claimed, the definition of input services cannot be imported to the application of refund. It is also to be said that the intention of the said notification granting refund/rebate is to make the export of goods free from duty and taxes. The rejection of refund claim on the specified services is against law and unjustified - Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Jurisdiction of the Tribunal to entertain the appeal regarding refund/rebate claim
- Eligibility of refund claims for services used beyond the place of removal for export of goods

Jurisdiction of the Tribunal:
The appellant argued that the Tribunal has jurisdiction to entertain the appeal for refund/rebate claims as the provisions of section 35B of the Central Excise Act regarding rebate of duty on goods exported do not apply to service tax appeals. The appellant engaged in the export of goods, not services, and the services were used in relation to the export of goods to the destination. The department rejected the refund claims, contending that services used beyond the place of removal were not eligible for refund. The appellant relied on legal precedents to support their argument, emphasizing that services availed up to the destination of the buyer of the goods should be eligible for refund/rebate.

Eligibility of Refund Claims:
The department rejected the refund claims stating that services used beyond the place of removal were not eligible for refund. The appellant argued that the definition of "specified services" under Notification No.41/2012-ST allowed for refund of taxable services used beyond factory or premises of production for the export of goods. Legal interpretations highlighted that when taxable services are used beyond the factory or any other place of production for export, they are eligible for rebate/refund. Precedent cases, such as M/s. Polyplex Corporation Ltd. and M/s. Jain Irrigation Systems Ltd., supported the appellant's position that services used for export activities should qualify for refund. The Tribunal analyzed these cases and concluded that the rejection of refund claims for specified services was unjustified and against the law.

In conclusion, the Tribunal set aside the rejection of refund claims for specified services used beyond the place of removal for the export of goods. The impugned order was modified to grant the rebate disallowed by the Commissioner (Appeals), allowing the appeals with any consequential reliefs.