2021 (8) TMI 809 - AT - Service Tax

Refund of Service Tax partially allowed; compliance with Notification No. 41/2012 acknowledged.

M/s. eShakti. com Private Limited Versus Commissioner of G.S.T. and Central Excise Chennai

The appeals were partly allowed as the Adjudicating Authority's denial of the refund of Service Tax paid on input services was set aside. The appellant's ... Refund of Service Tax - input service - Courier Bills - Swachh Bharat Cess and Krishi Kalyan Cess - partial rejection is made by holding that most of the services were not used beyond the factory of production - N/N. 41/2012, was substituted vide N/N. 01/2016-ST dated 03.02.2016 - HELD THAT:- Admittedly, the appellant is an exporter with no local sales and it is not even suspected by the Revenue about the appellant having any local sales - Most of the services which are held to be not eligible for refund for the reason of them being not used after the production stage were such that, as explained by the Learned Consultant for the appellant, used in the places located beyond the factory or the place of manufacture, like tailoring units, corporate office, clearing and forwarding services, advertisement, legal and accounting services, etc., which were obviously not located within the factory premises. The reasons attributed by the Adjudicating Authority cannot be sustained since there is no doubt that these services were not used in the factory of production but in any other place or premises of production or manufacture of the said goods, for their export. In view of this alone, it is seen that the appellant satisfies the conditions of N/N. 41/2012 ibid., as substituted vide N/N. 01/2016 ibid., and therefore, the denial cannot be sustained. Revenue has not doubted about the nature of service at the tailoring units, corporate office, clearing and forwarding services, advertisement, legal and accounting services, etc. Refund of service tax - courier bills - want of correlation of such bills with the exports/shipping bills - HELD THAT:- This issue requires re-adjudication in the light of the submission made by the Learned Consultant for the appellant. The impugned order on this issue is therefore set aside and the matter is restored to the file of the Adjudicating Authority, who shall cross-verify with the help of the appellant/appellant’s representative as regards correlation is concerned and then pass an appropriate order in accordance with law. Refund of Swachh Bharat Cess and Krishi Kalyan Cess - HELD THAT:- It is the settled position of law that these cesses form part of the Service Tax paid on various input services used in or in relation to the export of goods. This is a direct consequence of the issue of refund for want of correlation, which has been remanded by this forum. The appeals stand partly allowed and partly remanded. Issues:Refund of Service Tax paid on input services.Analysis:The appeals were filed by the assessee regarding the refund of Service Tax paid on input services. The appellant, an exporter of readymade garments, outsourced manufacturing to job workers in Gurgaon for online sales mainly to the U.S.A. The appellant also had Service Tax registration for their Chennai office. The Adjudicating Authority partially sanctioned the refund but rejected it for services not used beyond the factory. The Assistant Commissioner acknowledged the appellant's compliance with Notification No. 41/2012-ST but upheld the denial of refund. The appeals were filed challenging this decision.The appellant, represented by a consultant, argued that most services were used beyond the factory, fulfilling the conditions of the notification. The Adjudicating Authority's reasons for denial were deemed invalid as the services were used outside the factory for export. The order was set aside, and appeals were allowed with consequential benefits.Regarding the rejection of refund for courier bills due to lack of correlation with exports/shipping bills, the consultant contended that a Chartered Accountant Certificate had established the correlation, which was not considered by the authorities. The issue was sent back for re-adjudication to verify the correlation and pass an appropriate order.The rejection of refund for Swachh Bharat Cess and Krishi Kalyan Cess was linked to the correlation issue and was remanded back to the Adjudicating Authority. All contentions on this issue were left open for further review.Conclusively, the appeals were partly allowed and partly remanded for re-evaluation based on the issues discussed.