Export refund on testing services allowed where buyer specifications and invoice linkage established clear nexus with consignments.

Refund of service tax paid on Technical Testing & Analysis Service for export goods was held admissible where the testing was carried out strictly in accordance with the foreign buyer's specifications and the service invoices were linked to the export consignments. The record showed lot-wise testing at approved laboratories, invoices in the exporter's name, and a demonstrable nexus between the tested goods and the exports. A cursory objection that notification conditions were not met was found insufficient because it did not deal with the material evidence on record. The refund claim under the export refund notification therefore succeeded.

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Issues: Whether refund of service tax paid on Technical Testing & Analysis Service used for export goods was admissible under Notification No. 41/2007-ST where the testing was undertaken according to the foreign buyer's specifications and the service invoices were linked to the exported goods.

Analysis: The original authority had examined the documents and found that the tests were conducted in accordance with the buyer's IKEA specifications for textiles, which required lot or consignment-wise testing at approved laboratories. The service invoices were in the exporter's name and there was a broad co-relation between the tested goods and the export consignments. The lower appellate authority's order was found to be cryptic, as it merely recorded non-fulfilment of the notification conditions without dealing with the material placed on record. Since the testing was undertaken to satisfy the buyer's export requirements, the service tax paid on such input service was treated as eligible for refund.

Conclusion: The refund claim on Technical Testing & Analysis Service was admissible and the assessee's claim succeeded.

Ratio Decidendi: Where input service tax is paid on testing done strictly in accordance with foreign buyer specifications for export goods and the service has a demonstrable nexus with the export consignments, refund cannot be denied on a cursory or unsupported objection under the relevant export refund notification.

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