2013 (9) TMI 184 - AT - Service Tax

Refund Claim on Input Services - Export under Notification No.41/07-ST and Notification No.17/09-ST - Appellant filed refund claims in respect of input services utilized in connection with export of their goods in terms of Notification No.41/07-ST and Notification No.17/09-ST- refund was rejected by the department - Held that - In respect of testing and analysis service it was proper that in respect of the period for which Notification No.17/09 was in force - their claim needed to be re-examined in the light of the invoices that the appellant had to submit - orders were set aside and the matter was remanded to the adjudicating authority to re-examine the documents that may be submitted by the appellant and give a finding whether the nexus between the goods exported and input services is established and thereafter decide the matter. There were two defects in respect of CHA services - One was that original copy of invoice raised by CHA was not produced which was a defect that can be very easily cured because the appellants were willing to produce it before the adjudicating authority - The second issue was in respect of the fact that shipping bill numbers had not been indicated in the invoices raised by CHA - This being a condition to be complied with by a third party - some difficulties could have been there in the initial phase of implementation of such a scheme and if such nexus can be established through documents available otherwise, such evidence should be looked into and the substantial benefit cannot be denied when the requirements specified under the statute can be verified otherwise - - the appeals were allowed by way of remand.

Summary

Issues:
- Refund claims for input services related to export of goods under specific notifications.
- Rejection of refund claims based on non-compliance with invoicing requirements.
- Dispute over jurisdiction for deciding the matter.
- Arguments regarding compliance with statutory requirements for refund eligibility.
- Decision on remand for re-examination of documents and nexus between exported goods and input services.

Analysis:
In this judgment by the Appellate Tribunal CESTAT CHENNAI, two appeals were considered together, both arising from different impugned orders but relating to the same issue of refund claims for input services utilized in connection with the export of apparels. The appellant's refund claims were rejected for "CHA Services" and "Technical Testing & Analysis Services" due to non-compliance with invoicing requirements specified under relevant notifications. The appellant contended that they were willing to produce the original invoices and shipping bill numbers, which were not initially included by the third-party service providers. The advocate argued that the statutory requirements should not be a hindrance to granting refunds, especially when the necessary nexus can be established through other documents.

Regarding the jurisdictional issue raised by the Revenue, the Tribunal found that the matter did not involve a dispute over the rate of duty, thus deciding that a Single Member Bench could handle the case to avoid unnecessary workload on the Division Bench. On the merits, the Revenue argued that compliance with invoicing requirements was mandatory, citing relevant case law. However, the Tribunal noted that the defects in the invoices could be rectified, and the substantial benefit should not be denied if the statutory requirements could be verified through other means.

The Tribunal ultimately allowed the appeals by way of remand, setting aside the impugned orders and directing the adjudicating authority to re-examine the documents submitted by the appellant to establish the nexus between the exported goods and the input services. The decision emphasized the need to reconsider the claims in light of the specific notification in force during the relevant period, highlighting the importance of demonstrating the relationship between the exported goods and the services claimed for a refund.

This detailed analysis of the judgment showcases the Tribunal's approach to addressing the issues raised, balancing the statutory requirements with the practical considerations of establishing the necessary nexus for refund eligibility in the context of export-related input services.