2012 (4) TMI 199 - AT - Service Tax

Refund of service tax on taxable services used for export of goods assessee claimed refund of service tax on taxable services used for export of MT of Chrome Concentrate as per Notification 17/2009-ST dated 7.7.2009 export made through MMTC - claim denied on ground that the appellant are not the exporter of the goods but the exporter of the said goods was M/s MMTC Ltd., BBSR Held that - In EXIM Policy, 2004-2009, it has been clearly laid down that the appellants cannot export the said Chrome Concentrate directly, but required to export through M/s MMTC Ltd., the canalizing agency. However, agreement between appellant & MMTC, Arbitration Clause and other facts indicate that there is a link between the goods exported and the appellant through M/s MMTC and sellers are under obligation to accept the full liability , if any, without dispute. Therefore, in view of decision in case of State of Karnataka Vs. Azad Coach Builders Pvt. Ltd (2010 - TMI - 211475 - Supreme Court Of India), we remand the matter to the Commissioner (Appeals) for fresh decision.

Summary

Issues:
- Whether the appellant is entitled to a refund of service tax for the export of Chrome Concentrate through M/s MMTC Ltd.
- Interpretation of the agreement between the appellant and M/s MMTC regarding the export of goods.
- Application of the principle of law from the judgment of the Hon'ble Supreme Court in a similar case.

Analysis:
1. The main issue in this case is whether the appellant, a mining corporation, is entitled to a refund of service tax for the export of Chrome Concentrate through M/s MMTC Ltd. The appellant filed a refund claim which was rejected on the grounds that M/s MMTC was considered the actual exporter of the goods. The Commissioner (Appeals) upheld this decision, leading to the appellant's appeal.

2. The interpretation of the agreement between the appellant and M/s MMTC plays a crucial role in determining the export arrangement. The appellant argued that the agreement was entered into for the export of Chrome Concentrate, even though it appeared to be a sale agreement. The appellant highlighted clauses indicating that the goods sold to M/s MMTC were ultimately exported by them on behalf of the appellant.

3. The application of the principle of law from a judgment of the Hon'ble Supreme Court in a similar case was also pivotal. The appellant referenced a judgment that emphasized the inseverable link between local sale/purchase and export, stating that if the transaction is inextricably linked with export, a claim for exemption is justified. The appellant acknowledged that this judgment was passed after the Commissioner (Appeals) decision but argued for its relevance.

4. The Tribunal, after hearing both sides and examining the records, found that the goods were indeed exported through M/s MMTC as per the Export & Import Policy. The agreement between the appellant and M/s MMTC, although termed a sale agreement, indicated a connection between the goods exported and the appellant through M/s MMTC. The Tribunal also considered the Supreme Court judgment, which allowed benefits under certain circumstances, and decided to remand the matter to the Commissioner (Appeals) for a fresh decision, keeping all issues open and providing the appellant with a reasonable opportunity to present their case. The appeal was allowed by way of remand.