Export refund under service tax law cannot be denied merely because input-service invoices precede the export period.

Under the export refund scheme, refund of input service tax cannot be denied merely because the input-service invoices are dated before the export period or before the declaration, where the declaration was filed and the input services were otherwise used in providing exported taxable services. The timing gap was treated as a normal feature of continuous business activity and, by itself, did not defeat eligibility under Notification No. 12/2005 read with Rule 5 of the Export of Service Rules, 2005. The rejection based only on temporal mismatch was therefore unsustainable, and the accompanying breach of natural justice was also noted.

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Issues: Whether the refund claim of input service tax under Notification No. 12/2005 could be rejected merely because the invoices for input services were prior to the date of export or prior to the declaration, and whether rejection without proper notice offended natural justice.

Analysis: The refund was claimed under Notification No. 12/2005 read with Rule 5 of the Export of Service Rules, 2005. The appellant had filed the required declaration and there was no dispute that the input services were used in providing exported taxable services. The difference in dates between receipt of input services and export is a normal incident of continuous business activity and, by itself, does not defeat refund eligibility. The Board's Circular No. 120/01/2010/Service Tax also recognises that input credits may be carried over to later quarters where exports are not made in the earlier quarter. The rejection based only on mismatch of periods was therefore unsustainable. The plea of breach of natural justice was also accepted, though not separately examined in detail after holding the claim legally valid.

Conclusion: The refund claim could not be denied on the ground of temporal mismatch between input-service invoices and the export period, and the rejection order was unsustainable.

Final Conclusion: The appeal succeeded and the denial of refund was set aside, resulting in grant of the claimed relief to the assessee.

Ratio Decidendi: Under the export refund scheme, refund cannot be denied merely because input-service invoices precede the export period, where the declaration and substantive conditions for use of input services in exported output services are otherwise satisfied.

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