2015 (5) TMI 34 - AT - Service Tax

Appellant Wins Refund Battle on Export Services Tax Dispute

The appellant successfully obtained a refund of service tax paid on export services amounting to Rs. 4,27,873. Despite initial sanctioning of the refund, ... Export of Business Auxiliary Service - Denial of refund claim - Held that:- On perusal of records, such as application of refund and documents submitted alongwith the said refund it is observed that the appellant have submitted export invoices, FIRCs, C.A. Certificate etc., which clearly shows that the claim is in respect of service tax paid on the services which was admittedly provided to foreign entity and the remittance of service charges was made by the foreign entity in convertible foreign currency to the appellant. With this admitted fact it is beyond any doubt that the services clearly falls under the export service in terms of export of service Rules, 2005. In view of this fact denial of refund on the ground that the appellant have not claimed the refund considering as export services is misleading and not sustainable. Once it is undisputed that the service in question falls under Export of Services Rules, 2005 and the remittance of service charges made in convertible foreign currency which is evident from FIRCs submitted to the adjudicating authority. The claim of the appellant falls under the claim towards export of services therefore even though the adjudicating authority contended that services are covered under exemption notification NO. 13/2003 dated 20/6/2003 it cannot take away entitlement of refund under export of service. In view of my above discussions, I am of the considered view that the appellant in any case is legally entitled for the refund and therefore sanction of the refund is liable to be maintained and cannot be interfered therefore the impugned order is set aside - Decided in favour of assessee. Issues:1. Refund claim of service tax paid on export services.2. Dispute over the entitlement of refund under export of service rules.3. Jurisdiction of the Commissioner (Appeals) to entertain new pleas.Analysis:1. The appeal involved a refund claim of service tax paid on export services provided by the appellant to a foreign entity. The appellant submitted necessary documents, including export sale invoices, FIRC copies, and a CA certificate, to support the refund claim amounting to Rs. 4,27,873. The adjudicating authority initially sanctioned the refund, but the Revenue appealed, leading to the Commissioner (Appeals) setting aside the original order. The appellant contested this decision, arguing that the export of service and remittance in foreign currency were not disputed, making them eligible for the refund.2. The Ld. C.A. representing the appellant emphasized that the services provided fell under the Export of Services Rules, 2005, as evidenced by export invoices and FIRCs. Despite the adjudicating authority citing exemption under Notification No. 13/2003, the appellant's entitlement to the refund was justified. The Commissioner (Appeals) raised concerns about the timing of the plea regarding export services, stating it was beyond the scope of the original claim. However, the appellant maintained that all documents submitted were in line with an export services refund claim, and any new plea was within the Commissioner's jurisdiction to consider.3. The Ld. Superintendent (AR) for the Revenue reiterated the impugned order's findings, leading to a detailed analysis by the Member (J) considering the submissions and records. The Member found that the appellant's claim was valid as the services provided were indeed export services, supported by the remittance in foreign currency. The denial of the refund based on the exemption notification was deemed unsustainable. The Member concluded that the appellant was legally entitled to the refund under the Export of Services Rules, and the impugned order was set aside, allowing the appellant's appeal.This detailed analysis highlights the legal intricacies surrounding the refund claim of service tax paid on export services and the jurisdiction of authorities to entertain new pleas within the appellate process.