Refund of service tax on export-related services upheld where MMTC acted only as a canalising intermediary.

Refund of service tax under Notification No. 41/2012-ST was available where manganese ore exports were routed through MMTC Ltd. under a trade-policy channel, because MMTC acted only as a canalising intermediary and not the substantive commercial exporter. The claimant established ownership of the goods, contractual responsibility for the export, certification of the invoices, and the required nexus between the exported goods and the input services. The Tribunal found that the policy and notification did not bar refund merely because the shipping documents stood in MMTC's name, and the denial of refund was therefore unsustainable.

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Issues: Whether the appellant was entitled to refund of service tax paid on export-related services under Notification No. 41/2012-ST notwithstanding that the export of manganese ore was routed through MMTC Ltd. and the shipping documents stood in MMTC's name.

Analysis: The refund claim was examined in the setting of the Foreign Trade Policy restriction requiring export of manganese ore through MMTC Ltd., making MMTC's role one of a canalising/intermediary agency rather than the true commercial exporter in substance. The contracts and shipping arrangements showed that the appellant retained ownership and commercial responsibility for the goods, the export was on a back-to-back basis, and the service payments were connected with the export activity. The Tribunal also noted that the appellant had certified the invoices and established the correlation required by the notification, and that the statutory and policy framework did not disqualify the appellant merely because export was channelled through MMTC Ltd.

Conclusion: The appellant was held entitled to the refund claimed under Notification No. 41/2012-ST, and the denial of refund was not sustainable.

Final Conclusion: The impugned order was set aside and the appeal succeeded with consequential relief.

Ratio Decidendi: Where export is compulsorily routed through a canalising agency under the trade policy, the exporter for refund purposes is not defeated if the claimant otherwise establishes ownership, contractual responsibility, and the requisite nexus between the exported goods and the service tax paid on export-related services.

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