2024 (11) TMI 723 - AT - Service Tax

Refund of service tax paid on the input services - Claim of Notification Nos. 52/2011-S.T. dated 30.12.2011 and 41/2012-S.T. dated 29.06.2012 - HELD THAT - The appellants in this case had availed the insurance service for insuring the building, plant and machinery, storage of raw material etc. As regards storage warehousing services, the same were used/utilized by the appellants for procuring and movement of raw materials etc. Similarly, with regard to courier agency service, the conditions itemized in the table had not been fulfilled by the appellants inasmuch as the IEC code, nature of courier, name and address of recipient etc. were not forthcoming from the documents submitted for verification. Since, the said disputed services were not used / utilized for exportation of the goods, in our considered view, rejection of the refund claim by the lower authorities is in conformity with the Notification dated 30.12.2011. The Notification dated 30.12.2011 was superseded by Notification No. 41/2012-S.T. dated 29.06.2012 and effect such supersession, inter alia, is that in the case of excisable goods, taxable services that have been used beyond the place of removal, for the export of such goods, should be considered for grant of refund/rebate of service tax paid thereon. It is an admitted fact on record, that the appellants are the manufacturer of excisable goods and for that purpose, got themselves registered with the Central Excise authorities. Insofar as grant of refund/ rebate of service tax is concerned, the notification dated 29.06.2012 (supra) has provided that the services used beyond the place of removal (i.e., the factory gate, in the case of a manufacturer of excisable goods), should alone be considered and not otherwise. The manner of use/utilisation of the disputed services, as discussed in the respective orders passed by the lower authorities, makes the position amply clear that such use/utilisation are not beyond the place of removal and also the appellants had not submitted adequate documentary evidences to prove the case in their favour, that they are falling under the scope and purview of such notification, entitling them for grant of refund/rebate of service tax paid on such services. Since, there is no ambiguity in reading of the contents in the notifications referred supra, we are of the considered view, that there is no infirmity in the impugned order passed by the learned Commissioner (Appeals). The law is well settled that the wordings used in the exemption notification have to be strictly interpreted and the benefit provided therein should be available to the claimant, upon fulfilment of the conditions itemised therein. We find that for non-fulfilment of the conditions prescribed in the earlier notification No.14/2009-S.T. dated 07.07.2009 (rescinded vide notification No.52/2011-S.T. dated 30.12.2011), in the case of Magsons Exports 2013 (4) TMI 523 - CESTAT NEW DELHI has rejected the appeal filed by the assessee.

Summary

Issues:
Refund of service tax paid on input services for export goods under Notification Nos. 52/2011-S.T. and 41/2012-S.T.

Analysis:
The appellants, manufacturer-exporters of fruits pulp juices and vegetable products, sought refund of service tax paid on input services like storage, warehousing, courier, and insurance services for export goods. The jurisdictional service tax authorities denied the refund, stating that the services were not used for exporting final products. The original authority and Commissioner (Appeals) upheld the denial, leading to the appellants appealing to the Tribunal.

The Central Government's Notification No. 52/2011-S.T. provided a scheme for refund of service tax on services used for exporting goods. The disputed services fell under serial no. 1, 9, and 10 of the notification. The conditions for refund included using insurance service for export goods, storage and warehousing service only for export goods, and fulfilling specific requirements for courier services. The appellants had used the services for insuring assets, procuring raw materials, and other internal purposes, not directly related to exporting final products. The lower authorities rightly rejected the refund claim based on non-compliance with the notification's conditions.

Notification No. 41/2012-S.T. superseded the earlier notification and specified that taxable services used beyond the place of removal for excisable goods could be considered for refund/rebate. The appellants, being excisable goods manufacturers, failed to show that the disputed services were used beyond the place of removal, i.e., factory gate. Insufficient documentary evidence further weakened their case. The Tribunal found no ambiguity in the notifications and agreed with the lower authorities' decision to deny the refund.

The Tribunal emphasized strict interpretation of exemption notifications and the need to fulfill specified conditions for availing benefits. Referring to a previous case, it highlighted the importance of meeting the notification requirements. Ultimately, the Tribunal dismissed the appeals, as the appellants failed to demonstrate compliance with the conditions for refund under the notifications.

In conclusion, the Tribunal upheld the lower authorities' decision to deny the refund of service tax paid on input services, as the appellants did not meet the conditions outlined in the relevant notifications. The appeals were dismissed, emphasizing the necessity of strict compliance with exemption notification requirements for claiming refunds.