2017 (3) TMI 611 - AT - Service Tax

Rebate claim - export of services - Held that - The SCN states that there is no dispute with regard to the export of services and the payment of service tax on the services exported. The rebate sanctioning authority has proceeded to analyse the issue whether credit is admissible on input services which in my view exceeds the jurisdiction while conduct of proceedings for sanction of rebate - As the fact of export of services as well as the payment of service tax on the services exported is not in dispute, the rejection of rebate is unjustified - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against rejection of rebate claim by Commissioner (Appeals) under Export of Services Rules, 2005.

Analysis:
1. The appellant, a service provider under ITSS and BSS, filed a rebate claim for &8377; 37,99,999/- for services exported, utilizing accumulated CENVAT Credit. The rebate authority sanctioned &8377; 21,06,111/- and rejected &8377; 16,93,888/-. Commissioner (Appeals) upheld rebate of &8377; 3,80,283/- and remanded for verification, rejecting &8377; 13,13,605/-.

2. The appellant contended that the issue of credit on input services was beyond the rebate authority's jurisdiction, citing a previous Tribunal decision in their favor. The appellant argued that rebate under Notification No. 11/2005-ST only requires verification of service export, tax payment, not input credit eligibility. The appellant's consultant highlighted the department's non-dispute of service export and tax payment.

3. The Assistant Commissioner argued that irregular credit on input services led to rebate denial, justifying the rejection. The appellant's past Tribunal victory was cited, emphasizing the limited verification scope under Notification No. 11/2005-ST.

4. The Member (Judicial) noted that service export and tax payment were undisputed, questioning the rebate authority's jurisdiction to assess input credit eligibility. Citing the previous Tribunal decision, the rejection of rebate was deemed unjustified, aligning with the Final Order's principles. Consequently, the rebate rejection of &8377; 13,13,605/- was set aside, allowing the appeal with possible consequential reliefs.

In conclusion, the judgment favored the appellant, emphasizing the limited scope of verification under Notification No. 11/2005-ST for rebate claims related to service export and tax payment, setting aside the rebate rejection based on input credit eligibility beyond the authority's jurisdiction.