2014 (1) TMI 1151 - AT - Service Tax

Denial of refund claim - Business auxiliary service, consulting engineer and transport of goods by road services - Non fulfillment of conditions under Rule 3(2) of Export of Services Rules - Nexus between debit notes and services rendered - Held that - debit notes comply with the requirement of invoices and there is proper linkage for realizing all the amounts. In fact, the Rules provided for the details to be contained in invoices and the name of the document is not relevant. Further the Rules also provide in the case of assessees who availed CENVAT credit on the basis of documents containing certain deficiencies, the deficiencies in the invoices can be ignored - The original adjudicating authority himself admitted that as per the Board Circular 111/05/09-ST dated 24.2.2009, the location of the service receiver and not the place of performance is the relevant factor. Service receiver was located abroad. Once it is established that location of service receiver is sufficient for determining whether service was export of service and the service receiver was located aboard, the only requirement for assessee to get the refund should be to show that he had actually realized the amount for the services rendered by providing documentary evidence and he has actually paid the service tax. These two requirements have been fulfilled when we go through the debit notes, FIRCs and the CA certificates. As regards unjust enrichment, even as per the provisions of Section 11B of the Central Excise Act, in case of rebate in respect of exported goods, this need not be examined. The claim of the appellant is similar to rebate. Only the name has not been mentioned since the claim has been made on the ground of export of service. Therefore, unjust enrichment clause itself may not be applicable. From the debit notes it is quite clear that no service tax was charged and therefore the collection of service tax apparently has not been made. FIRCs amount tallies with the debit note. Under these circumstances it cannot be stated that the appellants have charged service tax - respondents are eligible for refund which has been sanctioned - Decided against Revenue.

Summary

Issues:
Refund claim of service tax paid on commission received for sales and marketing of goods manufactured abroad.

Analysis:
The respondent claimed a refund of service tax paid on commission received for sales and marketing of goods manufactured abroad and sold to Indian customers. The original authority rejected the refund claim citing reasons such as the absence of an agreement with the foreign principal, lack of export invoices, and failure to prove non-passing of service tax burden to customers. On appeal, the impugned order allowed the appeal, leading to the Revenue filing an appeal against it.

The Revenue argued that the respondents were not eligible for the refund due to various reasons, including the absence of linkage between debit notes and services rendered, lack of proof of non-passing of service tax burden, and failure to produce export invoices. However, the respondents contended that the impugned order had considered and addressed all these points. They argued that unjust enrichment did not apply as the tax was paid promptly upon realization, supported by a Chartered Accountant's certificate and foreign remittance certificate showing the nature of services and absence of unjust enrichment.

Upon considering the submissions, the Tribunal found that the debit notes complied with invoice requirements, establishing a proper linkage for amount realization. It was emphasized that the location of the service receiver, not the place of performance, was crucial in determining export of service, which was confirmed in this case as the service receiver was abroad. The Tribunal concluded that the requirements of realizing payment for services rendered and paying service tax were met through documentary evidence like debit notes, FIRCs, and CA certificates. The concept of unjust enrichment was deemed inapplicable, given the circumstances and supporting documentation provided by the respondent.

The Tribunal rejected the Revenue's appeal, affirming that the respondents were eligible for the refund as they had fulfilled the necessary conditions and provided adequate documentation. The decision was based on the compliance with invoice requirements, confirmation of service export, and absence of unjust enrichment, as supported by the Chartered Accountant's certificate and other relevant documents.