2022 (8) TMI 990 - AT - Service Tax

Refund of Service Tax paid - export of goods made under Bills of Export - Time limitation - validity of refund which is sanctioned for the full year i.e. from 09.04.2014 to 08.03.2015, which is beyond the coverage period of the last month of export i.e. August 2014 - N/N. 41/2012-ST dated 29.06.2012 - HELD THAT - On bare perusal of the Notification and the amendment thereof makes it abundantly clear that any service which is being received by an exporter of goods and are used exclusively for the export of goods and the Service Tax thereof has been paid, the refunds can be claimed provided that the services are rendered at a place which is neither the factory, nor any other place or premises of production or manufacture. This perusal makes it abundantly clear that the question of the service being rendered pre or post export has no significance. It has also been observed that there is no dispute as to the fact that the goods were exported by the Appellant assessee and the spot in respect of which licence fee has been paid. Paradeep Port Trust has been allotted only for export purposes. Once it is not in dispute that the services are specified for refund purposes and since Service Tax was actually paid on specified service pertaining to export activity, in terms of particular scheme of refund under Notification No.41/2012-ST as amended with clarifications, the exporter is eligible for refund - the order passed by the Ld.Commissioner(Appeals) cannot be sustained as substantive benefit should not be denied to an assessee if the conditions are fulfilled. The impugned order is set aside and the order passed by the Ld.Adjudicating authority stands restored - Appeal allowed.

Summary

Issues:
1. Refund of Service Tax on export of goods under Bills of Export.
2. Eligibility criteria for refund under Notification No.41/2012-ST.
3. Interpretation of conditions for refund eligibility.
4. Dispute regarding rejection of refund claim.
5. Consideration of prorata basis for refund calculation.
6. Government's intention behind rebate schemes for exporters.

Analysis:
1. The case involved a dispute over the refund of Service Tax paid on taxable specified services for the export of goods under Bills of Export. The Assistant Commissioner initially allowed a refund of Rs.58,74,409, but the Department appealed, arguing that the refund exceeded the coverage period of the export. The Commissioner(Appeals) modified the order, allowing a refund of Rs.26,12,389 out of the total claim.

2. The Appellant assessee contended that the refund claim met the conditions of Notification No.41/2012-ST and should be granted in full. The Appellant argued that the rejection of a portion of the refund claim was unjust as the services were used for export, fulfilling the criteria for refund eligibility under the beneficial Notification.

3. The Tribunal found that the Adjudicating authority had thoroughly reviewed the documents and conditions for the refund claim, ultimately sanctioning the refund. The Commissioner(Appeals) based the modification on the alleged oversight in considering the refund claim. The Tribunal emphasized that the services used for export, with paid Service Tax, were eligible for refund under the Notification.

4. The Tribunal highlighted that the dispute was not about the export or payment of Service Tax but about the conditions for refund eligibility. It noted that the rejection of the refund claim on technical grounds would defeat the purpose of rebate schemes intended to support Indian exporters in the global market.

5. The Tribunal observed that the Appellant was eligible for a refund on a prorata basis for the period during which exports were made. It emphasized that the intention behind the rebate schemes was to provide substantive benefits to exporters fulfilling the conditions, promoting a level playing field and competitiveness in global trade.

6. Considering the above discussions, the Tribunal set aside the Commissioner(Appeals)'s order and restored the Adjudicating authority's decision, allowing the appeal with consequential relief as per law. The judgment aimed to uphold the intended benefits of rebate schemes for exporters and promote fair competition in the global market.