2023 (9) TMI 359 - AT - Service Tax

Refund claim - rejection on the ground that the services like THC BC charges handling LDD. TSC. documentation charges are not specified service under Notification No. 41/2007-ST dated 06.10.2007 - HELD THAT - There is no dispute with regard to availing of the services for the purpose of export as well as payment of service tax thereon. This issue has been considered by the Hon ble High Court of Rajasthan in the case of UNION OF INDIA THROUGH THE COMMISSIONER CENTRAL EXCISE AND SERVICE TAX UDAIPUR VERSUS M/S. ARIHANT TILES AND MARBLES (P) LTD. 2019 (1) TMI 73 - RAJASTHAN HIGH COURT wherein the Hon ble High Court has held it is an admitted fact of the record that the services towards terminal and other handling services were availed by the assessee within the port area in connection with export of the goods. Thus irrespective of classification of service since the same are provided within the port for export of goods the benefit of refund should be available under the head port services in terms of notification dated 6-10-2017. Thus registration under a particular service is not necessary for the purpose of exemption under Notification No. 41/07 - the impugned order set aside - appeal allowed.

Summary

Issues involved:
The appeal against the rejection of a refund claim of Rs. 1,73,033/- under Notification No. 41/2007-ST dated 06.10.2007 for service tax paid on services used for export of finished goods.

Summary:

Issue 1: Refund claim rejection

The appellant filed a refund claim for service tax paid on services used for export of finished goods. The department observed discrepancies in the bills issued by various service providers, leading to a show cause notice proposing rejection of part of the refund claim. The original authority allowed a partial refund but rejected a significant amount, stating that certain services were not specified under the relevant notification. The Commissioner (Appeals) allowed a small portion of the refund claim. The appellant challenged the rejection of the remaining amount.

Issue 2: Interpretation of relevant notifications

The appellant argued that the impugned order did not properly consider Notification No. 41/07-ST dated 06.10.2007 and a circular issued by CBEC. The appellant contended that the services for which refund was claimed were covered under the notification, despite discrepancies in registration details of the service providers. The appellant relied on a previous court decision to support their interpretation of the notification.

Issue 3: Eligibility for refund

The appellant emphasized that the services were indeed used for export purposes and service tax was duly paid. They argued that registration under a specific service category should not be a hindrance to claiming the refund. The appellant cited a circular by CBEC to support their position and referred to a court decision that supported a broad interpretation of services eligible for refund under the notification.

Decision:

After considering arguments from both parties and relevant materials, the Member (Judicial) found that the refund claim was rejected based on services deemed not covered under the notification. Referring to a CBEC circular, it was noted that procedural violations by service providers should not affect the grant of refunds to exporters. Citing a court decision, the Member concluded that registration under a specific service was not a prerequisite for claiming exemption under the notification. Therefore, the impugned order was set aside, allowing the appeal with consequential relief as per law.