2021 (11) TMI 119 - AT - Service Tax

Rebate of Service Tax - Export of services - non-compliance with the prescription in Notification No. 41/2012 - HELD THAT - This is a case where, rebate of service tax paid on Manpower Supply Agency, Sampling/Analysis and Survey, Port Services, Port Services Barging and Loading, etc., used by the appellant for exporting their goods, was claimed. From the fact that the appellants chose not to participate in adjudication proceedings, it becomes clear that place of services has not been placed on record. The appellants have failed in discharging their responsibilities, at least bringing actual facts on record, which is their duty. The Adjudicating Authority was left with no choice other than passing the order, based on materials on record. The appellants have, in any case, no documentary evidences to rebut the findings of the Adjudicating Authority - there is no dispute that a legal ground can be urged at any point of time, but however, in the factual matrix, the lower authorities have not discussed nor had they any chance to go into the claims for refund of CENVAT Credit by analysing the appellants claims vis- -vis Rule 5 of the CENVAT Credit Rules. This issue is remanded to the file of the Adjudicating Authority, who shall only verify the claim of refund of the appellants under Rule 5 ibid. and pass a speaking order thereafter, after affording reasonable opportunity to the appellants - Appeal allowed by way of remand.

Summary

Issues:
Denial of rebate of Service Tax paid on services used in the export of salt.

Analysis:

Issue 1: Denial of rebate of Service Tax
The only issue in this case is the denial of rebate of Service Tax paid on services used in the export of salt. The appellants claimed rebate under Notification No. 41/2012-S.T. The Adjudicating Authority denied the rebate stating that the conditions of the Notification were not fulfilled. The First Appellate Authority partially confirmed the denial and remanded the issue for re-adjudication. The appellants argued that the objective is to exempt exports from taxes, and they had exported goods, used services for exports, and paid applicable Service Tax. They relied on various decisions to support their claim. However, the lower authorities found that the conditions were not met, and the appellants did not participate effectively in the adjudication process.

Issue 2: Interpretation of beneficial Notifications
The Tribunal referred to the Supreme Court decision in Commissioner of Cus. (Import), Mumbai v. Dilip Kumar & Company, emphasizing that beneficial Notifications must be strictly interpreted. Unless the claimant satisfies the conditions of such Notifications, they are not eligible for the benefits. The Tribunal noted that the appellants failed to provide necessary evidence or participate adequately in the proceedings, leading to the denial of the rebate.

Issue 3: Refund of CENVAT Credit
The appellants argued that if not eligible for the Notification benefit, they should receive a refund of CENVAT Credit under Rule 5 of the CENVAT Credit Rules, 2004. The Tribunal acknowledged that legal grounds can be raised at any time, but due to the appellants' non-participation, the lower authorities did not examine the refund claim under Rule 5. Therefore, the issue was remanded to the Adjudicating Authority for further examination. The appellants were directed to cooperate and assist in the process within a specified timeframe.

Conclusion:
The Tribunal set aside the impugned orders and remanded the cases to the Adjudicating Authority for re-examination of the refund claim under Rule 5 of the CENVAT Credit Rules. The appellants were instructed to participate fully in the process. The appeals were disposed of accordingly.

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