2016 (6) TMI 410 - AT - Service Tax

Payment of service tax to the CHA and Courier Agency for export of finished goods - refund of service tax in terms of Notification No. 41/2007-ST dated 06.10.2007 as amended vide Notification No. 17/2008-ST dated 19.02.2008 rejected - Held that - After going through the details given by the appellant along with the certificates of the CHA, find that the appellant has furnished sufficient details which if examined can establish the link proving to the fact of export of goods by the said CHA. This exercise has not been done by the lower authorities. Therefore find substance in the submission of the learned counsel for the appellant and that the impugned orders are not sustainable in law and therefore set aside the orders and remand both the cases to the original authority with the direction to examine the details furnished by the appellant to prove the payment of service tax to the CHA and Courier Agency for export of finished goods - Decided in favour of assessee by way of remand.

Summary

Issues:
1. Refund of service tax claimed by the appellant for two quarters.
2. Rejection of refund based on procedural lapses and failure to meet conditions specified in the Notification.
3. Appellant's argument regarding the denial of substantive benefits due to procedural lapses.
4. Applicability of relevant case laws.
5. Failure of the authorities to independently consider the appellant's submissions.
6. Decision on remand and direction to the original authority for re-examination.

Issue 1:
The appellant, engaged in manufacturing battery-operated electric cars, filed two refund applications for service tax under Notification No. 41/2007. The first refund claim for Rs. 1,00,511/- was rejected due to invoices not meeting Notification conditions, and the second claim for Rs. 79,632/- was partially sanctioned. The rejection was based on the failure to link service use to export of goods.

Issue 2:
The rejection was primarily due to invoices from certain agencies not containing required details specified in the Notification. The original authority found the invoices inadequate to prove the link between service tax payment and export of goods, leading to the denial of the refund claim.

Issue 3:
Appellant argued that despite procedural lapses, the substantive condition of goods export was met. Citing relevant case laws, the appellant contended that benefits cannot be denied solely based on procedural shortcomings. The appellant emphasized the fulfillment of the export condition and submission of necessary documents.

Issue 4:
The appellant referenced case laws like ONGC Ltd. v. CCE and CCE, Bhavnagar v. Saurashtra Chemicals Ltd. to support the argument that procedural lapses should not override substantive compliance with scheme requirements. The appellant highlighted the importance of considering the actual export of goods in such cases.

Issue 5:
The appellant criticized the authorities for not independently evaluating the documents provided, leading to a hasty rejection based on procedural grounds. The appellant asserted that sufficient details were furnished to establish the link between service tax payment and goods export, which the lower authorities failed to properly examine.

Issue 6:
The Judicial Member found merit in the appellant's arguments, concluding that the impugned orders were not legally sustainable. The orders were set aside, and both cases were remanded to the original authority for a detailed examination of the appellant's submissions. The adjudicating authority was directed to allow the appellant to produce additional evidence if needed for reconsideration of the refund claims. Consequently, both appeals were allowed by way of remand.