2023 (5) TMI 1194 - AT - Service Tax

Refund of service tax paid - Custom House Agents - Technical Testing and Analysis Agencies - denial on the ground of time limitation - denial also on the ground that the conditions set out in the N/N. 17/2009-ST dated 07.07.2009 have not been fulfilled by the appellant. Time Limitation - HELD THAT - As per para 2(f) the notification No.17/2009 the refund has to be filed within a period of one year. In these appeals it is seen that the refund claim for different quarters has been entirely rejected by the authorities below. It is submitted by the Ld. Counsel that a few shipping bills may be beyond the time limit. The authorities below ought to have considered the refund claims in regard to shipping bills which are within the time limit of one year. The entire claim for a quarter cannot be rejected merely because few of the shipping bills pertaining to that quarter is beyond the period of one year. The invoices which are filed within the period of one year ought to have been considered for the different quarters - This issue is therefore required to be remanded to the adjudicating authority who is directed to look into the matter as to the shipping bills which are within the time limit of one year. Rejection of refund claim on input services availed for testing and analysis - HELD THAT - The authorities below have held that testing is done for raw material and therefore it cannot be said that these services have nexus with the finished products which are exported. Even if the services are used for testing of raw materials such services have nexus with the manufacturing of finished products and therefore eligible for credit/refund. Further the period involved is prior to 01.04.2011 when the definition of input services had a wide ambit as it included the words activities relating to business . It is also to be stated that there is no condition attached to the notification with regard to refund claim in regard to testing and analysis services. The rejection of refund claim on the ground. Rejection of refund claim for the reason that the invoices are issued by the service provider in the address of their Head office at Guindy whereas the input services have been availed by the manufacturing unit at Pallavaram - HELD THAT - The appellants furnished the address of their Head office to the service provider as it happened to be the Head office. The service provider mentioned such address in the invoices and also for the reason that they received payment from the Head office of the appellant. The Department does not dispute that the appellant has received the services as per the invoices. When there is no dispute with regard to the services availed and the service tax paid it is opined that rejection of refund is without any basis. The issue with regard to rejection on the ground of time-bar has to be remanded to the adjudicating authority for de novo consideration. In such de novo adjudication the adjudicating authority shall take into consideration the discussions and view expressed above by us in regard to issue of testing and analysis services and the issue of invoices mentioning the address of the Guindy unit - The appeals are allowed by way of remand to the adjudicating authority.

Issues involved:
The case involves the rejection of refund claims of service tax filed under Notification No.17/2009-ST dated 07.07.2009. The issues include the rejection of refund claims on grounds of being time-barred, failure to fulfill conditions of the notification, and discrepancies in the invoices.

I. Appeals ST/40017/2014, ST/40018/2014 & ST/40023/2014:

Time-barred Refund Claim:
The appellant's refund claim was rejected on the basis of being time-barred. The appellant argued that the refund claim should be reckoned from the date of let export order, as per the notification. It was contended that while some shipping bills exceeded the one-year limit, many were within the stipulated time frame. The Tribunal held that claims within the one-year period should be considered, and the matter was remanded for further review by the adjudicating authority.

Conditions of the Notification:
The second ground for rejection was the failure to fulfill conditions of the notification. The department contended that testing services were only for raw materials and not for finished products. The Tribunal disagreed, stating that even if services were for raw materials, they had a nexus with the manufacturing of finished products, making them eligible for refund.

Invoice Discrepancies:
Refund claims for certain invoices were rejected due to discrepancies in the addresses on the invoices and the location of the manufacturing unit. The appellant argued that the goods were exported from the same entity, despite differing addresses. The Tribunal held that rejection based on address mismatches was unfounded when there was no dispute regarding services availed and tax paid.

II. Appeals ST/40019-40022/2014 & ST/40024/2014:

Testing and Analysis Services:
In these appeals, refund claims were rejected on the grounds that testing services were only for raw materials and that invoices mentioned a different address than the manufacturing unit. The Tribunal reiterated that services for raw materials still had a nexus with finished products and that the rejection lacked a legal basis.

Invoice Address Discrepancy:
Similarly, the rejection based on address discrepancies was deemed unjustified when services were availed without dispute. The Tribunal emphasized that the appellant's declaration, as per circular guidelines, should have been considered for refunds below Rs.5 lakhs. Consequently, the impugned orders in these appeals were set aside, and the appeals were allowed with consequential relief.

In conclusion, the Tribunal remanded one set of appeals for further review on the time-barred issue and allowed the other set of appeals with consequential relief, emphasizing the eligibility of refund claims for services related to both raw materials and finished products, irrespective of address discrepancies.

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