Refund of service tax on liquor export permit fees upheld after retrospective negation of the underlying levy and taxable service basis.

Service tax on export pass fees paid to the State Excise Department was treated as not sustainable because the fees were paid only to obtain export permits for liquor clearance, not as consideration for a taxable service. The Tribunal relied on earlier authority and on the retrospective effect of Section 117(1) of the Finance Act, 2019, which negated service tax on State Government charges connected with liquor-related privileges for the relevant period. As the underlying State levy had been retrospectively invalidated, rejection of refund could not stand, and consequential interest was also accepted.

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Issues: Whether service tax paid on export pass fees / Anugya Patra Shulk paid to the State Excise Department was refundable as not being leviable in the first place, and whether the assessee was entitled to consequential interest.

Analysis: The disputed amount was paid to obtain export permits under the State excise framework for clearance of alcohol, and the Tribunal followed earlier authority holding that such fees do not represent consideration for a taxable service. It also relied on the later statutory position under Section 117(1) of the Finance Act, 2019, which retrospectively negated levy of service tax on State Government charges connected with grant of liquor-related privileges for the relevant period. The Tribunal further accepted that the State levy had been struck down with retrospective effect, and therefore the service tax paid on that amount could not survive. On that basis, the rejection of refund was found unsustainable.

Conclusion: The assessee was held entitled to refund of the service tax paid on export pass fees, along with interest at 12% per annum from the date of deposit until refund.

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