2012 (7) TMI 601 - AT - Service Tax

Commissioner's Order Upheld in Refund Appeal for Medical Transcription Services

COMMISSIONER OF SERVICE TAX, BANGALORE Versus M/s FOCUS INFOSYS (INDIA) PVT LTD

The judge upheld the Commissioner (Appeals) order in an appeal regarding a refund claim for 'Medical Transcription Services' under 'Business Auxiliary ... Refund claim - Export of services - exemption notification for 'Medical Transcription Services' withdrawn effective from 01.03.2006 - respondents filed refund claims on 20.07.2006 under Rule 5 read with Notification 5/2006 CE (NT) dated 14.03.2006 which was rejected by the original authority on the ground that claim relating to earlier period cannot be entertained - claim related to the period from March 2006 to September 2006 - Commissioner (Appeals), holding that the ground on which the original authority rejected the refund claim was beyond the scope of the show-cause notice issued for proposing rejection for the refund claim – Held that:- denial of refund merely on the ground that the refund relates to period prior to registration not be justified. Therefore, there is no justification to interfere with the findings of the Commissioner in so far as the same related to the eligibility of the refund claim. Decided in favor of assessee. Issues: Appeal against Commissioner (Appeals) order rejecting refund claim for 'Medical Transcription Services' under 'Business Auxiliary Services' due to registration timing.Analysis:The case involves an appeal by the department against the Commissioner (Appeals) order rejecting a refund claim for 'Medical Transcription Services' under 'Business Auxiliary Services' due to the timing of registration. The respondent, a 100% EOU approved by the STPI, had filed refund claims for the period from March 2006 to September 2006 under Rule 5 read with Notification 5/2006 CE (NT) dated 14.03.2006. The original authority rejected the claim stating that registration was only done in November 2006, and thus, the claim for the earlier period could not be entertained. However, the Commissioner (Appeals) set aside the original authority's decision, stating that the rejection was beyond the scope of the show-cause notice issued for proposing rejection of the refund claim.The department, through the Learned DR, argued that entertaining a refund application for a period when the assessee was not registered with the department was not justified. The respondent's representative, the Learned CA, contended that since the respondent was registered with STPI and Customs authorities since 1999 and was only involved in exporting services, they were eligible for the refund of credit accumulated due to the withdrawal of exemption for 'Medical Transcription Services'. The CA emphasized that the export and use of 'input services' were easily ascertainable as the respondent regularly filed returns with the authorities.After considering both sides' submissions and reviewing the records, the judge, M Veeraiyan, noted that while generally, a refund claim for a period before registration may not be allowed, the specific circumstances of the case warranted a different approach. The respondent was registered with STPI and Customs authorities, operated as a 100% EOU, and was solely engaged in exporting services. The judge found that denial of the refund solely based on the period before registration may not be justified in this case. However, the judge highlighted that the correctness of the refund amount claimed had not been examined by the original authority, and thus, directed the authority to verify the quantum of the refund claimed before granting consequential relief to the respondent.Ultimately, the judge upheld the Commissioner (Appeals) order on merits, directing the original authority to grant consequential relief after verifying the accuracy of the refund amount claimed by the respondent. The appeal was disposed of accordingly.