Appeal dismissed for service tax refund on exports due to third-party exporter use.

The appeal by M/s. Vippy Industries Ltd. against the rejection of their refund claim for service tax paid on specified services utilized for exports was dismissed. It was determined that as the appellants were not exporters themselves but utilized a third-party Merchant Exporter, they did not meet the conditions outlined in Notification No. 17/2009-ST. The exemption for service tax paid on services used in exports was deemed applicable only to exporters as per the specified conditions. Consequently, the Order-in-Appeal rejecting the refund claim was upheld.

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Issues involved: Interpretation of Notification No. 17/2009-ST dated 07.07.2009 for claiming refund of service tax paid on specified services utilized for exports.

Summary:
The appeal was filed by M/s. Vippy Industries Ltd. against the Order-in-Appeal passed by Commissioner Central Excise (Appeal), Indore. The appellants, manufacturers of Soyabean Meal Extraction, filed a refund claim for &8377; 85,656/- for the period from May 2011 to July 2011 as per Notification No. 17/2009-ST dated 07.07.2009. A Show Cause Notice was issued to the appellants for rejecting the refund claim on the grounds of not being exporters. The Assistant Commissioner Order-in-Appeal rejected the claim, which was challenged by the appellants before the Commissioner (Appeal) who also rejected their appeal, leading to the current appeal.

Upon examination, it was found that the appellants had not made any exports themselves, and the exports were done through a third-party Merchant Exporter. The conditions specified in Notification 17/2009-ST for claiming refund of service tax paid on specified services utilized for exports were analyzed. These conditions included the exporter actually paying the service tax on the specified service to its provider and not taking CENVAT credit of the service tax used for exports under the CENVAT Credit Rules, 2004.

It was concluded that since the appellants were not exporters themselves, they did not fulfill the conditions outlined in Notification No. 17/2009-ST. The exemption of service tax paid on services used in export was deemed available only to exporters as per the conditions specified in the Notification. Therefore, the impugned order was upheld, and the appeal was rejected.

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