2017 (2) TMI 774 - AT - Service Tax

Refund claim - input services (GTA) received were exempted retrospectively - denial on the ground that invoice issued by the service provider does not contain the name and date of the consignment note - Held that - the appellant in lieu of the said compliance provided the records of supply of drivers by the man power recruitment agency and the said records shows that the service of manpower recruitment agency has been used for providing GTA service - The objective of condition of the notification regarding mention of details of consignment note in the invoice of service provider is to establish correlation between services provided and used in GTA service - As per the details of supply of the drivers by manpower supply agency, it is established that drivers were used for transportation of vehicle by which GTA service is provided. Therefore the object of the said condition stood made with the such records of supply of drivers and payment of service charges there against - impugned order denying refund only on the non compliance of procedural condition cannot be sustained - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim under Section 11B of Central Excise Act for Service Tax paid on exempted input services - Compliance with conditions of Notification No. 01/2009-ST - Denial of refund due to missing details of consignment note in service provider's invoice.

Analysis:
The appellant filed a refund claim under Section 11B of the Central Excise Act for Service Tax paid on input services exempted under Notification No. 01/2009-ST. The refund was sanctioned but later appealed by the Revenue, which was allowed based on the absence of consignment note details in the service provider's invoice. The appellant argued that although the invoice lacked these details, they provided records showing the use of drivers supplied by a recruitment agency for GTA services. The department did not dispute these records, indicating that the services were indeed used for GTA purposes, fulfilling the condition's objective. The appellant contended that the refund should not have been denied solely due to a procedural lapse.

The Revenue reiterated that fulfillment of conditions in the notification is essential for availing exemptions. They cited legal precedents to support this stance. The appellate authority and the Commissioner(Appeals) agreed on most points but denied the refund based on the missing consignment note details in the invoice, a condition stipulated in the exemption notification.

The Tribunal carefully considered both arguments and found that while the invoice did not include consignment note details, the appellant provided records demonstrating the use of drivers for GTA services. These records established a correlation between the services provided and the GTA services rendered. The Tribunal noted that the retrospective effect of the notification from 2009 meant that expecting compliance with conditions dating back to 2005 was impractical. Denying the refund solely on this basis would render the legislative amendment redundant. The Tribunal emphasized that the purpose of the condition was met through alternative records submitted by the appellant and that the denial of refund based on a procedural lapse was unjust. Therefore, the Tribunal set aside the impugned order and allowed the appeal, providing consequential relief as per the law.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing that the denial of the refund solely due to the non-compliance with a procedural condition was unjustified. The decision highlighted the practical difficulties in complying with retrospective conditions and the importance of considering alternative evidence to establish the fulfillment of the exemption's objectives.