Refunds denied for service tax on export services pre-amendment; allowed post-amendment.

The Tribunal ruled that refund claims for service tax paid on services used in export, where goods were exported under drawback claim, were not allowable for the period before the amendment by Notification No. 33/2008. Refunds were allowed post-amendment due to the deletion of the drawback condition in the notification. The cases were remanded for consideration of refunds for the post-amendment period, and the impugned orders were modified accordingly.

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Issues Involved:
Refund claims under Notification No. 41/2007 for service tax paid on services used in export; Disallowance of refunds due to goods exported under drawback claim; Allowability of refunds post-amendment; Interpretation of Notification conditions pre and post-amendment.

Analysis:
The appeals before the Appellate Tribunal CESTAT NEW DELHI involved identical issues regarding the disallowance of refund claims under Notification No. 41/2007 for service tax paid on various services used in the export of goods, where goods were exported under drawback claim. The appellant argued that refunds should be allowed despite drawback claims, citing the deletion of the drawback condition in Notification No. 33/2008. The appellant also referenced a Tribunal decision allowing refunds even when drawback was claimed. On the other hand, the Revenue contested these submissions, pointing out Division Bench decisions holding that refunds were not allowable post-amendment of Notification No. 41/2007.

After hearing both sides and reviewing the records, the Tribunal noted that refund claims covered periods both before and after the amendment by Notification No. 33/2008. Post-amendment, the condition regarding drawback availment was deleted, making refunds allowable if otherwise eligible. However, for the period before the amendment, the Tribunal found the Notification's clear condition stating that refunds cannot be paid if goods were exported under a service tax drawback claim. Citing a Division Bench decision, the Tribunal held that such refund claims could not be sanctioned for the pre-amendment period.

The Tribunal followed the Division Bench decision and ruled that refunds for the period before the amendment by Notification No. 33/2008 could not be granted. The cases were remanded to the adjudicating authority for bifurcating the refund and considering refunds for the period post-amendment. Consequently, the impugned orders were modified and disposed of accordingly.

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