2023 (6) TMI 467 - AT - Service Tax

Refund of Service Tax paid, erroneously under mistake of law - main thrust of the adjudicating authority while rejecting the refund claim was that the agreement between the parties was for export of goods and not for export of service, and therefore they are not eligible/entitled for refund of Service Tax paid by them - no evidence of export of service - HELD THAT - Learned Commissioner failed to touch this issue and did not give any finding whether the agreement was for export of goods or for services which according to me goes to the root of the issue involved herein. Therefore, without going into other submissions, the matter remanded back to the learned Commissioner (Appeals) for deciding the appeal afresh after giving proper reasoning for upholding/rejecting the finding of the adjudicating authority. The appeal is allowed by way of remand to Commissioner (Appeals) for deciding the same afresh within a period of three months from the date of receipt of copy of this order after giving sufficient opportunity of hearing to both the sides.

Summary

Issues involved:
The appeal assails the order rejecting a refund claim for Service Tax paid by the appellant, based on the nature of the agreement with M/s. Bolsius Nederland BV and the eligibility for refund.

Details of the judgment:

Issue 1: Nature of the agreement and eligibility for refund
The appellant, engaged in manufacturing excisable goods and providing taxable services, entered into an export order agreement with M/s. Bolsius Nederland BV. An advanced payment was received, but the project was canceled. The appellant claimed a refund of Service Tax paid on the amount retained by M/s. Bolsius Nederland BV. The adjudicating authority rejected the refund claim, stating the agreement was for the sale of goods, not services. The Commissioner upheld this finding without providing reasoning. The Tribunal found this to be the main issue and remanded the matter for a fresh decision, emphasizing the need to determine whether the agreement was for the export of goods or services, as it is crucial to the case.

Conclusion:
The Tribunal set aside the impugned order and allowed the appeal by remanding the matter to the Commissioner for a fresh decision within three months, with both parties given the opportunity to present their submissions and case laws.