Exemption compliance verification upheld; remand for documentary proof sustained and not a substantial question of law.

The article addresses exemption under Notification No. 27/2012-ST and the appellate tribunal's remand limited to documentary verification of certificates required for exemption; substantive eligibility (services to diplomatic missions) was not disputed. The tribunal directed conditional grant of exemption where documentary conditions are met, set aside penalties, and extended cum-duty benefit where applicable. The remand concerned factual and documentary compliance and did not dispense with mandatory conditions of the Notification. Because the impugned order primarily required factual verification rather than deciding a pure question of law, it did not raise a substantial question of law warranting interference.

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Issues: Whether the appellate tribunal erred in remanding the matter for verification of documentary compliance with an exemption notification and in treating the rendering of services to diplomatic missions as the sole substantive requirement for grant of exemption, and whether such remand gives rise to a substantial question of law warranting interference.

Analysis: The matter concerns exemption under Notification No. 27/2012-ST dated 20.06.2012, which exempts specified services to foreign diplomatic missions subject to enumerated conditions. The legal framework includes the service tax levy under Sections 66B and 66D of the Finance Act, 1994 and appellate jurisdiction under Section 35G of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994. The appellate tribunal observed that substantive eligibility (provision of services to diplomatic missions) was not in dispute and recorded that certificates required by the Notification had been obtained in most cases, though some were produced after adjudication. Consequently, the tribunal remanded the matter for verification of the certificates and directed grant of exemption to the extent documentary conditions are satisfied, while setting aside penalties and directing extension of cum-duty benefit where applicable. The remand was limited to factual and documentary verification; it did not dispense with the Notification's mandatory conditions. An appeal under Section 35G lies only on substantial questions of law; the impugned order principally directs factual scrutiny and implementation of documentary compliance rather than deciding a pure question of law.

Conclusion: The appellate tribunal's remand for verification of documentary compliance and conditional grant of exemption is warranted and does not raise a substantial question of law; the appeal is therefore dismissed and the impugned order is upheld insofar as it directs verification and conditional relief, with penalties set aside as directed by the tribunal.

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