2020 (1) TMI 191 - AT - Service Tax

Refund/rebate of service tax - N/N. 41/2007-ST dated 06.10.2007 as amended by Notification No 3/2008-ST dated 19.02.2008 - rejection of refund on the ground that appellant have not been complied with as the details of the exporters invoice relating to export goods are not mentioned in the lorry receipt and the corresponding shipping bill which is the mandatory condition in terms of the notification. HELD THAT - As per Notification No. 41/2007-S.T. certain co-relations are required to be made before sanctioning the refund claims. It is observed from C.B.E. C. Circular No. 120/01/2010-S.T., dated 19-1-2010 that exporters were facing certain difficulties in relation to one to one co-relation between input services and the exports made. The learned Chartered Accountant brings to the notice of the Bench para 3.2.1 of C.B.E. C. Circular dated 19-1-2010 to argue that self-certification of the exporter or a Chartered Accountant if given is sufficient to sanction refund - also, Revenue could not produce the required documents before the Bench to ascertain as to what extent co-relation can be made and whether any liberal view can be taken in these proceedings in view of C.B.E. C. Circular No. 120/01/2010-S.T., dated 19-1-2010. C.B.E. C. in Para 3.2.1 of Circular No. 120/01/2010-S.T., dated 19-1-2010 gave a clarification was with respect to Notification No. 5/2006-C.E. (N.T.) but it clearly conveys that in budget 2009 the scheme under Notification No. 41/2007-S.T. was simplified in Notification No. 17/2009-S.T. by providing self certification or Chartered Accountant s certification about co-relation and nexus between input Services the exports. That above logic can be followed for Notification No. 5/2006-C.E. (N.T.) where such simplification of Notification No. 17/2009-S.T. may not be available. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Rejection of refund claim of ?3,55,224 under Notification No. 41/2007-ST.
2. Compliance with conditions for claiming refund on GTA services.
3. Eligibility for refund of services in relation to export of goods under Notification No. 41/2007-S.T.

Issue 1: Rejection of refund claim of ?3,55,224 under Notification No. 41/2007-ST:
The appellant, M/s S K Sarawagi & Co. Pvt Ltd., filed a refund claim for service tax rebate on specified services used for exporting iron ore fines. The appellate order rejected the claim citing non-compliance with conditions of the notification, specifically the absence of exporters' invoice details in the lorry receipts. The appellant argued that in cases of bulk cargo, invoices are prepared after loading onto the vessel due to variable factors. The Chartered Accountant's certificate was presented to correlate the quantity exported with the quantity transported. The Tribunal noted the strict compliance required for availing benefits under the notification.

Issue 2: Compliance with conditions for claiming refund on GTA services:
The issue revolved around whether the appellant was eligible for a refund of services related to exporting goods under Notification No. 41/2007-S.T. The Circular No. 120/01/2010-S.T. highlighted difficulties faced by exporters in correlating input services with exports. The appellant argued that self-certification or a Chartered Accountant's certification should suffice for refund sanctioning, as per the circular. The Revenue failed to produce necessary documents to determine the extent of correlation required. Previous Tribunal decisions were cited to support the appellant's case, emphasizing the need for a broad correlation between transport evidence, service tax paid, and quantity exported.

Issue 3: Eligibility for refund of services in relation to export of goods under Notification No. 41/2007-S.T.:
The Tribunal referred to a similar case where refunds were allowed based on the peculiar nature of the goods and the need for aggregation at the port premises before preparing shipping documents. The Circular No. 120/01/2010-S.T. simplified the scheme by allowing self-certification for correlation between input services and exports. The Tribunal set aside the impugned order, restoring the Order-in-Original dated 11.04.2016, and allowed the appeal with consequential benefits, emphasizing the need for a broad correlation of input services and service tax paid with respect to exports.

In conclusion, the Tribunal's judgment addressed the issues of refund claim rejection, compliance with conditions for claiming refunds on GTA services, and eligibility for service tax refunds related to exporting goods under Notification No. 41/2007-S.T. The decision highlighted the importance of correlating input services with exports, considering the specific circumstances of each case and the need for a broad correlation to determine refund eligibility.