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2023 (2) TMI 481 - AT - Service TaxRejection of refund claim - services availed in relation to export of goods - GTA Service - Port Service - Technical Testing and Analysis Service - applicability of N/N. 41/2007-S.T., dated 6-10-2007 - It is the observation of the Ld.Commissioner(Appeals) that one to one co-relation of the services i.e. datewise accumulation of the materials within the port as per LR, loading of the same in the ship etc. has not been done and in absence of one to one co-relation the refund is inadmissible and cannot be allowed. HELD THAT - As per Notification No. 41/2007-S.T. certain co-relations are required to be made before sanctioning the refund claims. It is observed from C.B.E. C. Circular No. 120/01/2010-S.T., dated 19-1-2010 that exporters were facing certain difficulties in relation to one to one co-relation between input services and the exports made. So far as admissibility of Service tax paid on GTA Services is concerned, it is observed that similar refunds were allowed by CESTAT in the case of Jumbo Mining Ltd. v. CCE Hyderabad 2012 (7) TMI 739 - CESTAT, BANGALORE by holding that It cannot be the case that the goods are exported from Kakkinada Port without being transported from the factory of the appellants as claimed by them. Therefore, in the peculiar facts and circumstances of the case, the compliance of condition No. (iii) should be ascertained by broadly correlating the evidence relating to transport and service tax paid on such transport charges and the quantity exported. C.B.E. C. in Para 3.2.1 of Circular No. 120/01/2010-S.T., dated 19-1-2010 also clarified that The departmental officers are only required to make a basic scrutiny of the documents and, if found in order, sanction the refund within one month. The reports from the field show that this has improved the process of grant of refund considerably. It has, therefore, been decided that similar scheme should be followed for refund of CENVAT credit under Notification No. 5/2006-C.E. (N.T.). The procedure prescribed herein should be followed in all cases including the pending claims with immediate effect. Though the above clarification was with respect to Notification No. 5/2006-C.E. (N.T.) but it clearly conveys that in budget 2009 the scheme under Notification No. 41/2007-S.T. was simplified in Notification No. 17/2009-S.T. by providing self certification or Chartered Accountant s certification about co-relation and nexus between input Services the exports. That above logic can be followed for Notification No. 5/2006-C.E. (N.T.) where such simplification of Notification No. 17/2009-S.T. may not be available. Appeal allowed.
Issues:
1. Rejection of refund claim by Ld. Commissioner (Appeals). 2. Compliance with conditions for claiming refund on specified services. 3. Eligibility of refund of services availed for export of goods under Notification No. 41/2007-S.T. 4. Co-relation requirements for sanctioning refund claims. 5. Admissibility of service tax paid on GTA services. 6. Interpretation of C.B.E. & C. Circular No. 120/01/2010-S.T. Analysis: 1. The appeal was filed by M/s S K Sarawagi & Co. Pvt Ltd. against the Order-in-Appeal rejecting their refund claim of Rs. 36,00,235. The Ld. Commissioner (Appeals) set aside the Order-in-Original allowing the refund, citing non-compliance with conditions specified in the Notification No. 41/2007-ST dated 06.10.2007 as amended by Notification No. 3/2008-ST dated 19.02.2008. The dispute centered around the admissibility of refund related to 'GTA Service', 'Port Service', and Technical Testing and Analysis Service. 2. The Appellant argued that the goods are aggregated at the port premises before export, and export invoices are prepared only after loading onto the vessel as per contractual terms. They relied on Tribunal decisions emphasizing broad correlation between evidence of transport, service tax paid, and quantity exported. The Chartered Accountant's certificate also correlated the exported quantity with transport documents. 3. The main issue was whether the Appellant was eligible for refund of services used for exporting goods under Notification No. 41/2007-S.T. The C.B.E. & C. Circular clarified that exporters faced difficulties in one-to-one co-relation between input services and exports. The Circular suggested self-certification or Chartered Accountant's certification for refund sanctioning, which the Appellant argued should suffice. 4. The Tribunal observed that similar refunds were allowed previously in cases where broad correlation between transport evidence, service tax paid, and quantity exported was established. The Circular further simplified the refund process by allowing self-certification or Chartered Accountant's certification for co-relation between input services and exports. 5. Consequently, the impugned order was set aside, and the Order-in-Original dated 10.03.2016 was restored, allowing the appeal with consequential benefits. The Tribunal emphasized the need for a broad correlation of input services and service tax paid concerning exports, as per the Circular's guidelines. This detailed analysis covers the issues raised in the judgment, providing a comprehensive understanding of the legal reasoning and decisions made by the Tribunal.
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