Tribunal rules in favor of manufacturer in service tax refund claim case

The Tribunal ruled in favor of the appellant, a manufacturer of iron and steel products, in a case concerning a refund claim of service tax paid to Custom House Agent (CHA) services for exported goods. The Tribunal held that the appellant only needed to provide proof of their payment of service tax to the service provider, not the service provider's payment to the exchequer. The lower authorities' requirement for proof of the service provider's payment was deemed unnecessary. The matter was remanded for reconsideration based on the appellant's documentary evidence, setting aside the appellate authority's order.

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Issues:
Refund claim of service tax paid to Custom House Agent (CHA) services for goods exported by the appellant.

Analysis:
The appellant, a manufacturer of iron and steel products, exported goods using CHA services and paid service tax amounting to Rs.1,98,260. The original authority rejected the refund claim as the appellant failed to submit proof of payment of service tax to the service providers as required by Notification 41/07-ST. The appellant later submitted proof of payment to the CHAs, but the Commissioner of Central Excise (Appeals) rejected the claim on the grounds that mere certificates from CHAs do not constitute evidence of service tax payment. The appellant argued that as per the notification, they only needed to show proof of their payment of service tax, not the CHA's payment to the exchequer.

The appellant cited Circular 106/9/08-ST, which clarified that invoices/bills/challans from the service provider are sufficient evidence for refund claims. They also relied on the Tribunal's judgment in Hindustan Gum & Chemicals Ltd. vs. CCE 2010 (20) STR 666, which stated that exporters only need to prove their payment of service tax to the service provider, not the service provider's payment to the exchequer. The Revenue accepted the clarification provided by the Board circular but maintained the lower authority's findings.

The Tribunal held that the appellant only needed to provide documentary evidence of their payment of service tax to the service provider, not proof of the service provider's payment to the exchequer. The Tribunal disagreed with the lower authorities' requirement for challans showing the service provider's payment. It also noted that Notification no. 17/08-ST allows for a refund of service tax paid for services provided by the Customs House Agent in relation to export goods. The matter was remanded to the original adjudicating authority to reconsider the refund claim based on the appellant's documentary evidence.

In conclusion, the Tribunal set aside the appellate authority's order, stating that the appellant had provided sufficient evidence of their payment of service tax to the service provider. The matter was remanded for further consideration based on the documentary evidence submitted by the appellant.

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