Refund of service tax on exports denied where drawback was claimed in breach of the notification condition

Refund of service tax on export of goods was held inadmissible where the exporter had claimed drawback, because clause (e) of the proviso to the opening paragraph of Notification No. 41/2007-ST made non-availment of drawback a mandatory condition for refund eligibility. The argument that the drawback claim was filed routinely did not cure the breach of the notification condition. On that basis, the refund claim failed and the appeals were dismissed.

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Issues: Whether refund of service tax on export of goods was admissible when the exporter had availed drawback and the notification required non-availment of drawback.

Analysis: The refund claim was rejected under clause (e) of the proviso to the opening paragraph of Notification No. 41/2007-ST dated 06/10/2007, which disentitled an exporter from refund where drawback had been claimed on the export goods. The appellant's plea that the drawback claim had been filed routinely did not alter the fact that the stipulated condition of non-availment of drawback had been violated. Compliance with the notification condition was mandatory for refund eligibility.

Conclusion: The refund was not admissible and the appeals were dismissed.

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