2012 (9) TMI 702 - AT - Service Tax

Refund of service tax amounts paid on services in relation to the exports under Notification l lo.41/2007-ST rejection of refund non-mention of the commission amounts in the shipping bill Held that - This is a mere procedural condition and the refund claims can be considered if there is documentary evidence regarding the amount of service tax paid on the actual amounts of commissions disbursed - refund allowed

Summary

Issues:
Refund of service tax for exporters under Notification No. 41/2007-ST, rejection of refund claims based on specific grounds, incorporation of additional grounds in MISC applications, non-availability of drawback, time-limit for filing refund claims, declaration of commission in shipping bills.

Analysis:
The judgment addresses the MISC applications filed by exporters seeking the inclusion of additional grounds for refund of service tax paid on services related to exports under Notification No. 41/2007-ST. The authorities had rejected the refund claims based on various grounds. Firstly, the condition of not availing drawback of service tax at the time of export was not met by the exporters, even though this condition was omitted before the refund claims were filed. Secondly, there was a discrepancy in the time-limit for filing refund claims as per the notification. Thirdly, the requirement to declare the commission amount in the shipping bill was not fulfilled in some cases.

The advocate for the appellants argued that as per a Tribunal decision, if the refund claims meet the requirements post-amendment, they cannot be rejected. He highlighted that at the time of the refund application, there was no stipulation against availing drawback or a time-limit of one year. He also contended that the omission of commission amounts in shipping bills was a procedural issue not mentioned in the show cause notices. The department's representative opposed these arguments, citing a Tribunal decision stating that notification amendments are prospective.

The judgment distinguishes between a Single Member Bench decision and a Division Bench decision, emphasizing the need to follow the latter. It notes that the objective of the notification was to free Indian exports from domestic taxes to enhance competitiveness. Referring to a circular clarifying the application of amended provisions to pending claims, the judge ruled in favor of applying the amended provisions for both objections raised by the department. Regarding the commission amounts in shipping bills, the judge deemed it a procedural condition, allowing refund consideration with proper documentary evidence.

Consequently, the impugned orders were set aside, and all five appeals were allowed, directing the refund amounts to be granted to the appellants if otherwise due.