2017 (3) TMI 1543 - AT - Service Tax

Appellant granted refund for post-manufacturing services in export; clarifies eligibility under exemption rules

The Tribunal allowed the appellant's refund claim for input services used post-manufacturing for export of goods, despite claiming drawback on specified ... Refund claim - rejection on the ground that the appellant has claimed the drawback on specified services - Held that: - Tribunal in the case of M/s Mittal International and others [2017 (3) TMI 1512 - CESTAT CHANDIGARH] wherein this Tribunal held that the drawback Rules are not applicable for the input services received for export of goods which only includes input services used in manufacturing or processing of export goods - the refund claim filed by the appellant cannot be rejected on the ground that the appellant has claimed drawback on specified services - appeal allowed - decided in favor of appellant. Issues: Refund claim rejection under exemption Notification No. 41/2007-ST for various input services for export of goods.Analysis:The appellant filed an appeal against the rejection of the refund claim for input services received in relation to Testing Services, Customs House Agency Service, Insurance Service, Courier Services, and Banking Services for export of goods. The claim was denied on the basis that the appellant had already claimed drawback on specified services. The Tribunal considered a similar issue in a previous case and ruled that drawback Rules do not apply to input services used after the manufacturing of goods for export. As the services in question were received post-manufacturing and not included in the drawback claim calculation, the appellant's refund claim cannot be rejected solely based on claiming drawback on specified services. Therefore, the Tribunal held that the appellant is entitled to the refund claim, setting aside the impugned order and allowing the appeal with any consequential relief.This judgment clarifies the application of drawback Rules to input services used for export of goods post-manufacturing. It establishes that services received after the manufacturing process, such as Testing Services, Customs House Agency Service, Insurance Service, Courier Services, and Banking Services, are not subject to the drawback Rules and are eligible for refund claims under exemption Notification No. 41/2007-ST. The decision in a previous case provided a precedent for this ruling, ensuring consistency in the interpretation and application of the law regarding refund claims for input services in export scenarios. The Tribunal's analysis highlights the importance of distinguishing between input services used in manufacturing or processing of export goods and those utilized after the manufacturing stage when determining eligibility for refund claims under relevant notifications.