Refund for warranty replacement exports allowed where no separate foreign exchange realisation arose and courier tax was paid on export logistics.

Refund of service tax paid on courier agency services used for export-related warranty replacement supplies was held admissible where the spare parts were exported free of cost under contractual warranty obligations. The absence of a separate foreign exchange realisation certificate could not justify denial of refund because no sale proceeds were separately due or recoverable for those replacement supplies, and the export proceeds for the main products had already been realised. On that basis, rejection of the refund claim was unsustainable.

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Issues: Whether refund of service tax paid on courier agency services used for export of spare parts was admissible when the exports were made as free warranty replacement and no separate foreign exchange realization arose.

Analysis: The exported spare parts were supplied to overseas dealers under contractual warranty obligations without monetary consideration. The invoices and agreement on record showed that the goods were supplied as free warranty replacement. In such circumstances, the absence of a foreign exchange realization certificate could not be treated as a valid ground to deny refund, because no sale proceeds were separately due or recoverable for the warranty replacement supplies and the export proceeds for the main products had already been realised.

Conclusion: The refund claim was admissible and the rejection of refund was unsustainable.

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