Tribunal grants exemption from service tax for exported goods despite filing delay

The Tribunal ruled in favor of the appellant, holding that the delay in filing EXP-2 did not warrant denial of the exemption from service tax for the exported goods. The decision emphasized the importance of fulfilling procedural requirements while recognizing the need for flexibility in certain circumstances, ultimately providing relief to the appellant.

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Issues:
1. Whether the transport services availed by the appellant for export of goods were rightly denied under Notification No. 31/2012-ST due to belated filing of prescribed declarations EXP-1 and EXP-2.

Analysis:
The appellant, a manufacturer of vicks drop, regularly exports products and claimed exemption from service tax under Notification No. 31/2012-ST. The notification exempts taxable services received by exporters for transport of goods to the port or airport for export, subject to specific conditions. These conditions include filing Form EXP-1 before availing the exemption, being registered with an export promotion council, holding an Import-Export Code Number, and filing returns in Form EXP-2 every six months. The appellant faced a show cause notice for filing EXP-2 late, leading to a demand for service tax. The adjudication confirmed the demand, which was upheld by the Commissioner (Appeals) stating that the appellant did not fulfill the specified conditions.

The appellant argued before the Tribunal that they filed EXP-2 before the show cause notice was issued, albeit with a 22-day delay. They contended that the filing delay was not stipulated as non-condonable in the notification and that the main purpose of export was fulfilled. They relied on a High Court ruling emphasizing that procedural requirements could be condoned for valid reasons, especially when the benefit was new. The Revenue argued that the appellant failed to file EXP-1 and EXP-2 on time, justifying the denial of exemption.

Upon review, the Tribunal found that EXP-1 was a general declaration not required with each consignment, and once filed, it remained valid unless there were changes in the exporter's details. Considering the 22-day delay in filing EXP-2, the Tribunal concluded that the benefit of exemption could not be denied for the admitted export of goods. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential benefits.

In conclusion, the Tribunal ruled in favor of the appellant, holding that the delay in filing EXP-2 did not warrant denial of the exemption from service tax for the exported goods. The decision highlighted the importance of fulfilling procedural requirements while also recognizing the need for flexibility in certain circumstances, ultimately providing relief to the appellant in this case.

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