2015 (6) TMI 747 - AT - Service Tax

Denial of refund claim - Input services used in Export of goods - Notification 41/2007-ST. - Held that - It is very clear that the refund is payable on the taxable services which the exporter receives and uses for export. Further it has been clarified that the procedural violation by the service provider in the instant case the service provider is registered under Business Support Service or Business Auxiliary Service, (as the case may be) needs to be dealt with separately, independent of the process of refund. In other words, the procedural lacunae should not come in the way in granting substantial benefit which has been provided under the notification, which is - Central Board of Excise and Customs has clearly clarified that these services, which are rendered for the export of goods, refund is eligible under Notification 41/2007-ST. The only ground of appeal which has been raised by the departmental authorities is that the said services would not fall under the categories listed under Notification 41/2007-ST. In our considered view, the issue is no more res integra as the hon ble High Court of Gujarat in the case of Commissioner of Central Excise vs. AIA Engineering Pvt. Ltd. 2015 (1) TMI 1044 - GUJARAT HIGH COURT , on similar situation has held in favour of the assessee. This Tribunal in the case of Commissioner of Central Excise, Belapur vs. Pratap Re-Rolling Pvt. Ltd. 2014 (9) TMI 814-CESTAT MUMBAI has held that the assessee is eligible for refund relying upon the same Board circular. - Decided against Revenue.

Summary

Issues:
1. Refund of service tax paid by the service provider under Business Support Services and Business Auxiliary Services.

Analysis:
The judgment involves three appeals filed by Revenue against Orders-in-Appeal passed by the Commissioner of Central Excise. The issue revolves around the refund of service tax paid by the service provider under the categories of Business Support Services and Business Auxiliary Services. The respondent claimed refund on the grounds that the services were rendered in relation to exported goods, specifically terminal handling and documentation charges. The adjudicating authority initially rejected the refund claims, but the first appellate authority overturned this decision and allowed the refund claims filed by the assessee.

Upon reviewing the records, the first appellate authority cited specific reasons for setting aside the adjudicating authority's orders and granting the refund claims. The authority highlighted that the services provided by registered service providers fell under Port services or other Port services covered by the notification, making the denial of refund legally incorrect. Referring to a circular issued by the Central Board of Excise and Customs, the authority clarified that procedural violations by the service provider should not hinder the refund process for taxable services used for export. The authority also referenced legal precedents emphasizing the importance of substantive benefits over procedural technicalities in such cases.

The judgment further noted that the issue had been settled in previous cases, with the High Court and the Tribunal ruling in favor of the assessee regarding eligibility for refunds under similar circumstances. The Tribunal emphasized that services rendered for the export of goods were eligible for refund under the relevant notification. Ultimately, the Tribunal found the Revenue's appeals lacking in merit and rejected them, upholding the impugned orders and confirming the allowance of refund claims by the assessee.