Service tax refund for export input services denied where exports were under duty drawback and amendment operated prospectively.

Refund of service tax on input services used for export was available under Notification No. 41/2007-ST only where the exports were not made under duty drawback. Notification No. 33/2008-ST later removed that restriction, but the amendment was treated as prospective and not applicable to refund claims relating to exports made before 07.12.2008. As the exports in question were made before that date and under duty drawback, the amended notification did not support the refund claim. The refund claims were therefore held inadmissible and the impugned orders were upheld.

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Issues: Whether refund of service tax on input services used for exports made under duty drawback claim was admissible under Notification No. 41/2007-ST, and whether Notification No. 33/2008-ST removing the drawback restriction operated retrospectively.

Analysis: Refund under Notification No. 41/2007-ST was subject to the condition that the exports were not made under duty drawback. The later Notification No. 33/2008-ST withdrew that restriction, but the Tribunal had already held in earlier decisions that the amendment was prospective and could not be applied to refund claims relating to exports made before 07.12.2008. The present exports were admittedly made prior to that date and under drawback, so the amended notification could not assist the appellants.

Conclusion: The refund claims were not admissible. The impugned orders were upheld and the appeals failed.

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