Appellate Authority Grants Refund for Service Tax on Export Inputs; Upholds Pre-GST Legal Framework for Entitlement.

The appellate authority set aside the impugned order, allowing the appeal and granting the appellant entitlement to a refund of service tax paid on input services related to the export of goods. The decision was based on Section 142(4) of the CGST Act, which mandates that refund claims be processed under existing law for exports conducted before or after the GST implementation. The judgment aligned with precedent cases, confirming that the appellant was eligible for the rebate under the old legal framework, notwithstanding the introduction of GST. Consequential benefits were awarded in accordance with applicable law.

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Issues:
Sanction of rebate (by way of refund) of CENVAT credit of Service Tax paid on input services.

Analysis:
The appellant filed appeals against the Order-In-Appeal setting aside the Order-In-Original sanctioning a refund amount. The key issue was the sanction of rebate of CENVAT credit of Service Tax paid on input services. The appellant availed technical inspection and certification services for export of cut and polished diamonds. The appellant contended entitlement to rebate under Notification No. 41 of 2012. The adjudicating authority initially allowed the rebate claim, but the Commissioner (Appeals) held that post-GST introduction, provisions for refund of service tax were repealed, making the notification inapplicable to goods exported under the GST regime.

The appellate authority's findings were deemed inconsistent with existing law and a CBIC circular. Section 142(4) of the CGST Act was pivotal, stating that refund claims for goods or services exported before or after the appointed day must be handled in accordance with existing law. This provision indicated that tax paid on input services for exports under the old law should be covered by the existing law.

The judgment referenced previous cases like Vinod Kumar Diamond India Pvt Ltd and Fine Automotive and Industrial Radiators Pvt Ltd., where refund of service tax in similar circumstances was permitted. The conclusion was that the appellant was entitled to the refund of service tax paid. The impugned order was set aside, and the appeal was allowed with any consequential benefits as per the law.

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