Export service tax refund can coexist with input duty drawback where the two levies arise at different stages of the export chain.

Drawback on excise duty paid on inputs and refund of Service Tax on cargo handling services were treated as operating in different fields. The tribunal distinguished duty borne on inputs used in manufacture from tax paid on export-related services availed after clearance of goods, and held that the drawback mechanism does not absorb the service tax incidence. Because the service tax related to facilitating export rather than to the exported goods themselves, refund of that tax was allowable while drawback on input duty remained separately available. The refund claim was upheld and the objection to simultaneous relief was rejected.

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Issues: Whether Service Tax paid on cargo handling services used for export of goods was refundable notwithstanding the assessee's claim of drawback on excise duty paid on inputs.

Analysis: The Tribunal drew a distinction between drawback relating to excise duty suffered on inputs used in manufacture and Service Tax paid on services availed after clearance of goods in the course of export. It held that drawback operates in the sphere of Central Excise on input duty, whereas Service Tax paid on export-related services is not covered by that drawback mechanism. As taxes are not exported and goods alone are exported, the service tax borne for facilitating export was held refundable, while the drawback on input duty remained separately allowable.

Conclusion: The assessee's claim for refund of Service Tax on cargo handling service was upheld, and the Revenue's objection to simultaneous allowance of drawback and service tax refund was rejected.

Final Conclusion: The order allowing refund was affirmed and the Revenue's appeal failed.

Ratio Decidendi: Drawback on excise duty paid on inputs and refund of Service Tax on export-related services operate in different fields and can both be granted where the levies relate to separate stages and separate tax incidences in the export chain.

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