2021 (8) TMI 933 - AT - Service Tax

Rebate of service tax paid - rebate claims rejected on the ground that the activities of the received services had no nexus with export consignment - Clause (e ) of para 3 of N/N. 41/2012-ST dated 29.06.2012 - HELD THAT - The invoices in question were issued by the Chartered Accountant- Anuj Maheshwari and Company, copy of which is available in the appeal record. The invoices reads as professional consultancy for export against export consignment as per details, giving the export invoice number, date and quantity etc. Further, Service Tax has been charged by the Consultant and it is undisputed that such invoices were paid along with service tax. There is no bar by a professional Chartered Accountant in giving business consultancy for the purpose of export. Further, the Commissioner (Appeals) has travelled beyond the scope of Show Cause Notice rejecting the appeal on a new ground i.e. Chartered Accountant in practice cannot give consultancy for export - the appellant is entitled to rebate on the Service Tax paid on the consultancy bill, for consulting the Chartered Accountant. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Rebate claim on service tax paid for specified services used in export of soap stone.
2. Rejection of rebate claims by Original Authority and Commissioner (Appeals) based on lack of nexus with export consignment.
3. New ground for rejection by Commissioner (Appeals) - Professional consultancy by Chartered Accountant.
4. Interpretation of relevant provisions post Finance Act, 2012.
5. Appeal against rejection of rebate claims.

Analysis:
1. The appellant, a soap stone manufacturer, claimed rebate on service tax paid for services used in exporting soap stone. The appellant, not registered under Central Excise or Service Tax Rules, had a service tax code as per Notification No. 41/2012-ST. The rebate claims were disputed in three appeals arising from a single Order-in-Appeal.

2. The Original Authority and Commissioner (Appeals) rejected rebate claims citing lack of nexus between received services and export consignment activities. Previous appeals were allowed by CESTAT, but the Commissioner (Appeals) rejected the current appeals on a new ground related to professional consultancy by a Chartered Accountant.

3. The Commissioner (Appeals) rejected the appeals based on invoices issued by a Chartered Accountant, claiming the services provided were beyond the scope of the Chartered Accountants Act, 1949. The Commissioner's decision was deemed contrary to law and unsustainable, as it introduced a new ground not present in the original proceedings.

4. Post Finance Act, 2012, the definition of taxable services changed, making any activity for consideration a taxable service if not in the negative list. The Commissioner's decision was challenged for misinterpretation of relevant provisions and applying them incorrectly to the case at hand.

5. After considering the contentions and facts, the Tribunal found no prohibition on a Chartered Accountant providing business consultancy for export. The Commissioner's decision was overturned, and the rebate on Service Tax paid for consultancy services was allowed. The adjudicating authority was directed to grant the rebate amount with interest within 45 days.