2016 (9) TMI 493 - AT - Service Tax

Tribunal affirms refund claims for service tax, upholding order-in-appeal and dismissing Revenue's appeals

Commissioner of Central Excise Mumbai Versus M/s Sonal Garments (India) Pvt. Ltd.

The Tribunal upheld the order-in-appeal sanctioning the refund claim of service tax on CHA services, foreign commission agent services, and technical ... Rejection of Refund - co-relation between the amount of refund claim and the documents produced – CHA services – Held that: - records properly verified by the first appellate authority. Also, condition of Notification No.41/2002 satisfied from the documents. Foreign commission agent services – Held that: - The first appellate authority has categorically recorded a factual finding that the respondent exporter has produced a copy of agreement and shipping bills which are clearly indicating the sales commission vis-a-vis relevant exports – relevant documents on record. Technical testing and analysis services – non-production of copies of written agreement entered into with the buyer – Held that: - the first appellate authority has considered the copies of standard operating procedure, hereby establishing that the necessary documents were produced by the appellant – allowance of refund justified – decided against Revenue. Issues:Appeals filed by Revenue against order-in-appeal sanctioning refund claim of service tax on CHA services, foreign commission agent services, and technical testing and analysis services without considering the factual matrix.Analysis:The Revenue contested the refund claim of service tax paid on CHA services, technical testing and analysis services, and foreign commission agent services. The Revenue argued that there was no correlation between the refund claim amount and the documents produced. However, upon review, the Tribunal found that the appeals filed by Revenue lacked merit.In the case of CHA services, the first appellate authority had verified the documents and found them to be in order. The invoices of CHA and clearing agents were found to be easily relatable to shipping bills and export invoices. The appellate authority concluded that the conditions of Notification No.41/2002 were satisfied based on the documents provided. The Revenue failed to present any contrary evidence to challenge these factual findings.Regarding the refund claim for service tax paid on technical testing and analysis services, the Revenue argued that the respondent did not provide copies of the written agreement with the buyer. However, the first appellate authority considered the standard operating procedure and supply manual of the foreign buyers, which detailed the nature of testing and the approved laboratories. The testing was carried out as per the supply manual by approved laboratories, and the invoices were in the name of the exporter. The appellate authority relied on a previous Tribunal decision to allow the refund.The service tax paid on services rendered by foreign commission agents for procurement of export orders was also contested by the Revenue due to the lack of submission of an agreement or contract with the commission agent. However, the first appellate authority found that the respondent had produced a copy of the agreement and shipping bills clearly indicating the sales commission related to exports. It was determined that the commission amount was paid under the reverse charge mechanism and reflected on relevant documents.In conclusion, the Tribunal found no dispute regarding the export of garments and the services provided by CHA, technical testing and analysis, and foreign commission agents. With no contradictory evidence presented by the Revenue, the Tribunal upheld the impugned order as correct, legal, and free from any infirmity.