2017 (1) TMI 1448 - AT - Service Tax

Rebate of service tax paid by the appellant as per the invoices raised by them for export - N/N. 12/2005-ST dated 19/04/2005 - Held that - service tax paid by the appellant as per the invoices raised by them for export - the appellant is entitled to the rebate claim under the provisions of N/N. 12/2005-ST. So far the issue of rejection of the claim on the ground that the same have exceeded the estimate filed in declaration, we hold that such interpretation is uncalled for and against the spirit of the notification. The prior declaration is only an estimate and there is bound to be difference with the actual claim - No part of rebate can be rejected on the ground that declaration or intimation filed appellant amount mentioned is different from actual claim. Matter remanded back to the Adjudicating authority for limited purpose of verifying the fact that the appellant have only erroneously shown the rebate amount in the Cenvat credit column in the return, wherein they have not taken Cenvat credit as claimed by them - appeal allowed by way of remand.

Summary

Issues Involved:
1. Allowance of rebate claim under Notification No.12/2005-ST.
2. Eligibility of input services for rebate.
3. Clerical mistakes in ST-3 returns.
4. Compliance with conditions of Notification No.12/2005-ST.
5. Rejection of rebate claims based on estimates in prior declarations.

Detailed Analysis:

1. Allowance of Rebate Claim under Notification No.12/2005-ST:
The appellant filed rebate claims for service tax paid on input services used in providing output services under Notification No.12/2005-ST for two periods: April to September 2010 and January to March 2010. The claims were initially rejected by the adjudicating authority and upheld by the Commissioner (Appeals) on grounds that the appellant had availed Cenvat credit, which was contrary to the conditions of the notification. The Tribunal, however, found that the rejection was not based on a reasoned and speaking order and held that the appellant was entitled to the rebate claim under the provisions of the said notification.

2. Eligibility of Input Services for Rebate:
The Tribunal examined whether the input services claimed by the appellant were eligible for rebate. The Commissioner (Appeals) had disallowed certain services such as printing and stationery expenses, postage and courier, professional charges, and interest expenses, stating they were not required for providing output services. The Tribunal, however, referenced a precedent where similar services were deemed necessary for a software unit and thus eligible. The Tribunal concluded that all input services claimed by the appellant were utilized for the export of services and were eligible for rebate.

3. Clerical Mistakes in ST-3 Returns:
The appellant argued that the figures showing Cenvat credit in the ST-3 returns were a clerical mistake, and they had not actually availed or utilized the Cenvat credit. They supported this claim with a Chartered Accountant's certificate. The Tribunal accepted this explanation, referencing a previous Tribunal decision in the appellant's favor where a similar clerical mistake was made. The Tribunal directed the adjudicating authority to verify the appellant's records to confirm that no Cenvat credit was availed and to disburse the rebate accordingly.

4. Compliance with Conditions of Notification No.12/2005-ST:
The Commissioner (Appeals) had rejected the rebate claims based on the appellant's alleged non-compliance with condition No.2(e) of the notification, which prohibits availing Cenvat credit. The Tribunal found that the appellant had substantially complied with all conditions of the notification and that minor procedural non-compliances should not result in the denial of substantive benefits. The Tribunal cited the Punjab & Haryana High Court ruling in Commissioner of Service Tax Vs Convergys India Pvt. Ltd., which supported the view that procedural lapses should not deny substantive concessions.

5. Rejection of Rebate Claims Based on Estimates in Prior Declarations:
The Commissioner (Appeals) had also rejected part of the rebate claims on the ground that the actual claims exceeded the estimates provided in prior declarations. The Tribunal found this interpretation to be uncalled for and against the spirit of the notification. It held that prior declarations were merely estimates and that discrepancies between estimated and actual claims were to be expected. The Tribunal ruled that no part of the rebate could be rejected on this ground.

Conclusion:
The Tribunal set aside the impugned orders and remanded the matter back to the adjudicating authority for the limited purpose of verifying the appellant's records to confirm that no Cenvat credit was availed. The authority was directed to complete this verification within 75 days and disburse the eligible rebate claims. The appellant was instructed to present their documents and registers for verification and seek an opportunity for a hearing.