2023 (1) TMI 543 - AT - Service Tax

Refund of Service Tax paid for export of goods under Notification No. 17/2009-ST - Foreign Agent Commission - Banking and Financial Services - failure of appellant to produce the original invoices - refund of service tax is paid on Banking and Financial Services have been denied on the ground that the appellant have failed to correlate the said services availed by them with the export of goods - HELD THAT - The admissibility of refund on Foreign Agent Commission has been examined by Tribunal in the case of M/S VST INDUSTRIES LTD. VERSUS CCE, C ST, HYDERABAD 2017 (10) TMI 24 - CESTAT HYDERABAD wherein it was held that The procedures prescribed in the notification are to facilitate verification of the claims. Since there is no dispute with regard to the export made or the service tax paid, the non-fulfilment of the conditions is condonable, the non-fulfilment of the conditions is only a procedural lapse and can be condoned - thus, refund of Service Tax on Foreign Agent Commission cannot be denied. Rejection of refund in respect of CHA services - appellant failed to provide the original copy of invoices - HELD THAT - The Commissioner has observed that due to statutory requirement of rule 4A of the Service Tax Rules, 1994, the Invoice/ bill/ challans, on which the refund is sought, has to be mandatorily signed by the person providing taxable service or by a person authorized by him in respect of such taxable service. Therefore, it can be clearly inferred that the invoices are to be submitted in original - Learned Counsel argued that they had produced this circular before the lower authority but no findings have given. It is seen that the observations of Commissioner (Appeals) are in contradiction with the directions of CBIC. The order of Commissioner (Appeals) on this count is set aside and matter remanded to the original adjudicating authority with directions to follow the Circular of CBIC in this regard. Denial of refund of Service Tax paid on Banking and Financial Services - appellant has failed to correlate the services availed with the exports of goods - HELD THAT - All the business of the appellant was export of goods, therefore, no co-relation was necessary as all the services were availed for export of goods. It is seen that the Commissioner (Appeals) has not taking note of this observation. If the said assertion is correct then no co-relation may be required for claiming the refund. However, since this fact has not been examined by the lower authority. The order of this account is set aside, the matter remanded to the Adjudicating authority. Appeal allowed in part and part matter on remand.

Summary

Issues:
1. Denial of refund of Service Tax paid under Notification No. 17/2009-ST for export of goods.
2. Refund denial for Foreign Agent commission, Banking and Financial Services, and Custom and House Agent Service.

Analysis:

Issue 1: Denial of refund under Notification No. 17/2009-ST:
The appellant filed an appeal against the Commissioner (Appeals) order remanding the matter relating to the refund of Service Tax paid for export of goods under Notification No. 17/2009-ST. The Counsel argued that the issue involved the denial of refund for various services utilized in the export process. The Tribunal examined similar cases in the past to determine the admissibility of the refund. It was observed that the appellant had paid the Service Tax under reverse charge mechanism for the services utilized in the export process. The Tribunal found that the appellant had filed the refund applications under the incorrect notification, and the conditions of the correct notification had not been complied with. Following precedent, the Tribunal held that the appellant was eligible for a refund under the correct notification. Therefore, the refund on Foreign Agent Commission was allowed.

Issue 2.1: Refund denial for Foreign Agent commission:
The Tribunal analyzed the denial of refund for Foreign Agent commission due to non-compliance with conditions under the correct notification. Referring to previous judgments, the Tribunal held that procedural lapses could be condoned if the fact of export had been established. The Tribunal found no reason to deviate from this view and allowed the refund on Foreign Agent Commission.

Issue 2.2: Refund denial for Custom and House Agent Service:
The refund of Service Tax paid on Customs House Agent Service was denied due to the failure of the appellant to produce original invoices. The Counsel argued that certified copies of documents should be accepted as per CBIC clarification, but the impugned order ignored this instruction. The Tribunal set aside the order and remanded the matter to the original adjudicating authority to follow the CBIC circular in this regard.

Issue 2.3: Refund denial for Banking and Financial Services:
The denial of refund for Banking and Financial Services was based on the appellant's failure to correlate the services availed with the export of goods. The Counsel argued that all services were related to the export of goods as the appellant's business solely focused on exports. The Commissioner (Appeals) did not consider this assertion, leading to the order being set aside, and the matter remanded for further examination by the Adjudicating authority.

In conclusion, the appeal was partly allowed, with the Tribunal providing detailed analysis and directions on each issue raised. The judgment emphasized compliance with specific notifications and procedural requirements for claiming refunds on various services utilized in the export process.