Rebate of Swachch Bharat Cess on exported services upheld where no CENVAT credit was availed, avoiding double benefit.

Rebate of Swachch Bharat Cess on input services used for export of output services was held admissible where no CENVAT credit had been taken on the inputs or input services. Condition 2(e) of Notification No. 39/2012-CE(NT), as amended by Notification No. 03/2016-ST, could not be read in isolation, and the claim did not create an impermissible double benefit. The earlier sanction based on the same factual position was not shown to be erroneous, so the orders denying rebate were set aside and the claim restored with consequential relief.

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Issues: Whether rebate of Swachch Bharat Cess paid on input services used for exporting output services was admissible when no CENVAT credit had been availed on the inputs or input services, and whether condition 2(e) of Notification No. 39/2012-CE(NT), as amended, was violated.

Analysis: The rebate claim was examined in the context of Notification No. 39/2012-CE(NT) as amended by Notification No. 03/2016-ST, which extended rebate relief in respect of the relevant cess. The decisive fact was that no CENVAT credit had been taken on the inputs or input services on which rebate was claimed. Condition 2(e) could not be read in isolation, and on a proper reading of the notification the appellant's claim did not amount to an impermissible double benefit. The earlier sanction by the original authority was based on this factual position and was not shown to be erroneous.

Conclusion: The rebate was admissible. The orders denying the rebate were unsustainable and were set aside in favour of the assessee.

Final Conclusion: The appeals succeeded, and the rebate claim was restored with consequential relief.

Ratio Decidendi: Where no CENVAT credit has been availed on the inputs or input services, a rebate notification permitting refund of cess on exported services cannot be denied by reading the relevant condition in isolation.

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