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2023 (1) TMI 106 - AT - Service TaxDenial of cash refund of service tax - Export of final products - period prior to amendment of Notification 41/2007-STdated 06.10.2007 by Notification 33/2008-STdated 07.12.2008 - HELD THAT - The appellant have exported certain goods and utilized certain services. The appellant have sought refund of service tax paid on those services under Notification 41/2007-ST. the decision of Tribunal in the case of BHARAT ART AND CRAFTS, SHIVAM EXPORT (100% EOU) , BOTHRA INTERNATIONAL VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR-II 2016 (4) TMI 197 - CESTAT NEW DELHI clearly lays down that if the appellants have availed draw back, the refund under Notification 41/2007 dated 06.10.2007cannot be claimed for the period prior to amendment of Notification 41/2007-STdated 06.10.2007 by 33/2008-ST dated 07.12.2008. Appeal dismissed.
Issues:
Denial of refund of service tax under Notification 41/2007-STdated 06.10.2007. Analysis: The appellant, M/s Arvind Limited, filed an appeal against the denial of refund of service tax under Notification 41/2007-STdated 06.10.2007. The appellant claimed refund of service tax paid on 17 services used for exporting their final product. The issue revolved around whether the draw back claimed affected the eligibility for the refund under the said notification. The Ministry of Finance clarified that the 17 services were not considered for calculating draw back rates. However, an amendment was made by Notification 33/2008-ST, removing the clause regarding draw back. The appellant relied on a previous decision by the Tribunal but the current judgment stated that the amendment was not retrospective, denying cash refund for the period before the amendment. The Tribunal's decision in the case of Bharat Art & Crafts set a precedent that if draw back was availed, the refund under Notification 41/2007-STdated 06.10.2007 could not be claimed for the period before the amendment by Notification 33/2008-STdated 07.12.2008. The decision highlighted that the Drawback Rules considered the average amount of tax paid on taxable services used as input services for export goods. The judgment emphasized that the proviso in Notification 41/2007-ST indicated that goods must be exported without availing draw back of service tax paid on specified services under the Drawback Rules. The absence of these services in fixing the all industry rates of drawback would render the proviso redundant. The judgment also noted that the amendment by Notification 33/2008-ST did not have retrospective effect, further supporting the denial of the refund claims. In conclusion, the Tribunal found no merit in the appeal and dismissed it based on the precedent set by the Bharat Art & Crafts case and the interpretation of the Drawback Rules and relevant notifications. The judgment reiterated that the draw back claimed affected the eligibility for cash refund under Notification 41/2007-STdated 06.10.2007 before the subsequent amendment by Notification 33/2008-STdated 07.12.2008.
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