2017 (3) TMI 66 - AT - Service Tax

Refund claim - N/N. 27/2012-CE(NT), dated 18.06.2012 - rejection on the ground of jurisdiction - export of service from an unregistered premises - Held that - One of the condition of the notification is that to get refund application is to be made to the jurisdictional authority in whose jurisdiction registered premise of the service provider exists. It follows that in absence of registration, identity of the jurisdictional authority is not ascertainable - Notification being part of legislation, is to be strictly construed for grant of the fiscal benefit and burden to prove that grant is permissible lies on the claimant. The admitted case of the respondent being non-registration of the premises from which exportable services was provided, appellant failed to discharge its burden of proof and also did not fulfill the conditions of the notification - appeal allowed - decided in favor of Revenue.

Issues:
1. Granting refund of service tax for exported services from an unregistered premises.
2. Interpretation of Notification No.27/2012-CE(NT) regarding refund application jurisdiction.
3. Accumulation of service tax on input services for exported output services.
4. Requirement of registration for refund application jurisdiction.
5. Interpretation of Notification 5/2006-CE (NT) for refund eligibility.
6. Determination of relevant date for limitation in export of service cases.

Issue 1: Granting refund of service tax for exported services from an unregistered premises
The Revenue contended that the Commissioner (Appeals) erred in granting a refund of service tax to the respondent for services exported from an unregistered premises, citing Notification No.27/2012-CE(NT). The notification specified that refund applications must be made to the jurisdictional authority where the registered premises of the service provider are located. The notification required an application for refund to be filed before the authority where the registered premises existed, emphasizing the need for registration for refund eligibility.

Issue 2: Interpretation of Notification No.27/2012-CE(NT) regarding refund application jurisdiction
Both parties relied on the notification, which allowed refund of Cenvat credit subject to specified conditions. The condition of registration of the premises was deemed mandatory to ascertain the jurisdiction of the refund-granting authority. The law mandated that the application for refund must be made to the jurisdictional authority where the registered premise of the service provider exists, highlighting the importance of registration for determining the authority for refund claims.

Issue 3: Accumulation of service tax on input services for exported output services
The respondent argued that the service tax paid on input services for exporting output services had accumulated, believing it to be refundable as the input services were used in India while the output services were exported. The appellate authority overturned the adjudicating authority's decision to deny the refund, as the services were provided from an unregistered premises, emphasizing the genuine belief of the respondent regarding refund eligibility.

Issue 4: Requirement of registration for refund application jurisdiction
The notification, being part of legislation, required strict construction for granting fiscal benefits, with the burden of proving eligibility resting on the claimant. As the respondent failed to prove registration of the premises from which exportable services were provided, it did not fulfill the conditions of the notification, leading to the appeal of the Revenue being allowed and the Commissioner (Appeals) order being set aside.

Issue 5: Interpretation of Notification 5/2006-CE (NT) for refund eligibility
For appeals ST/40920 & 40922/2016, the notification 5/2006-CE (NT) was applicable, with a provision similar to the requirement of registration for refund eligibility. The appeals of the Revenue were allowed based on this notification, aligning with the interpretation of jurisdiction based on registration status.

Issue 6: Determination of relevant date for limitation in export of service cases
The judgment clarified that the date of realization of foreign exchange was deemed the relevant date for export of service cases, addressing the issue of determining the relevant date for limitation purposes in such cases.

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