Refund of service tax on documentation charges cannot be denied by reclassifying supplier-taxed services at recipient level.

Refund of service tax paid on documentation charges could not be denied to the recipient merely because the service was not separately shown as a taxable input service. The supplier had already discharged tax on the invoices under Clearing and Forwarding Agency Service, and that tax treatment could not be recharacterised by officers dealing with the recipient's refund or credit claim. The principle applied was that jurisdictional officers of the recipient cannot contest the tax quantum or classification already accepted at the supplier's end. The denial of refund was therefore unsustainable and the claim was allowed.

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Issues: Whether the refund of service tax paid on documentation charges, treated by the supplier as Clearing and Forwarding Agency Service, could be denied to the recipient on the ground that the service was not shown as a taxable input service.

Analysis: The service tax on the documentation charges had already been discharged by the supplier under the category of Clearing and Forwarding Agency Service, and the invoices supported that position. In such circumstances, the officers having jurisdiction over the recipient unit could not deny the refund by recharacterising the service or by disputing the tax treatment already adopted at the supplier's end. The principle that the quantum of duty or tax determined by the supplier's jurisdictional officers cannot be contested by officers dealing with the recipient's credit claim governed the issue.

Conclusion: The denial of refund was unsustainable in law and the issue was decided in favour of the assessee.

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