2017 (2) TMI 720 - AT - Service Tax

Refund claim - specified services used for export of goods - Banking Other services - rejection on account of lack of proof of payment of service tax - Sale of Goods by Foreign Commission Agent - rejection on account of non-payment of service tax - Held that - bank statements clearly indicate not only the commission charges of the bank but also service tax amounts debited to the account of appellant. It has further been mentioned that the bank charges and service tax payment are with reference to the export carried out by the appellant. The statement has also been attested by the bank - rejection of refund unjustified. Sale of Goods by Foreign Commission Agent - Held that - the issue is no more res integra and it is decided that payment of service tax is allowable when paid from Cenvat credit account. There can be no case for rejection of such refund claim made under N/N. 41/2007 - refund allowable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Rejection of refund claim for service tax paid on specified services used for export.
2. Rejection of refund for banking services due to lack of proof of payment of service tax.
3. Rejection of refund for foreign commission agent service due to non-payment of service tax in cash.

Analysis:
1. The appeal was against the rejection of a refund claim for service tax paid on specified services used for export. The original authority and Commissioner (Appeals) rejected the refund claim for two services: Banking Other services and Sale of Goods by Foreign Commission Agent. The rejection was based on the lack of proof of payment of service tax in accordance with specific conditions mentioned in Notification No. 41/2007. The appellant contended that the service tax paid on banking services was indeed made along with banking charges to the bank, as evidenced by bank statements. The Tribunal found the rejection unjustified and allowed the refund for banking services under Sr. No. 14 of the Notification.

2. Regarding the rejection of the refund for foreign commission agent service, the issue was the non-payment of service tax in cash as required by the Notification. The service tax amount was paid using the Cenvat credit balance, leading to the rejection of the refund claim. However, the Tribunal referred to previous decisions in favor of the appellant, establishing that payment of service tax through Cenvat credit was permissible. Relying on these precedents, the Tribunal held that the refund for the foreign commission agent service was allowable under Sr. No. 15 of the Notification.

3. The Tribunal's decision was based on the settled issue that payment of service tax through Cenvat credit was permissible, as established in previous cases. Therefore, the rejection of the refund claim for the foreign commission agent service was overturned, and the appeal was allowed with consequential benefits to the appellant.