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ST - Refund - Notfn 41/2007 - If documents provide necessary particulars as required under Rule 4A of STR, 1994, merely because documents are debit notes refund cannot be denied: CESTAT

By TIOL News Service

NEW DELHI, OCT 19, 2015: THE refund claims filed in terms of notification 41/2007-ST have been rejected by the lower authorities on the ground that -

(a) the documents issued in respect of services relating to activities at the port of export have not been issued by the port or any person authorized by the port. Inasmuch as only if the service provider pays the service tax in respect of services rendered to the appellant under the head 'port services' coming under section 65 (105) (zn), the refund can be allowed whereas in the present case the service provider has paid the tax under BAS.

(b) that the documents being debit notes are not proper documents in terms of rule 4A of STR, 1994 and, therefore, refund is not admissible.

After considering the submissions made by both sides, the Bench tackled both the issues as below -

Rejection ground (a)

+ Circular No. 112/6/2009 - ST, dated 12/03/2009, Sr. no. VII reads -

S.No.

Issue Raised

Clarification

VII

The Service provider providing services to the exporter provides various services. But he has registration of only one service. The refund is being denied on the grounds that the taxable services that are not covered under the registration are not eligible for such refunds.

Notification No. 41/2007-S.T. provides exemption by way of refund from specified taxable services used for export of goods.  Granting refund to exporters, on taxable services that he receives and uses for export do not require verification of registration certificate of the supplier of service. Therefore, refund should be granted in such cases, if otherwise in order.  The procedural violations by the service provider need to be dealt separately, independent of the process of refund.

So also, the Bench adverted to the letter 334/1/2010-TRU dated 26/02/2010, Annexure C of this clarification and observed -

++ The implication of these two clarifications read together, along with the amendment brought forth in the definition of port services, in our view, is that the exporter should not be unduly burdened with a condition to establish that the service provider was registered under port services.

Rejection ground (b)

+ The documents reveal that they contain all the details as required under Rule 4A of the Service Tax Rules, 1994. The purpose sought to be served by specifying the details that are to be contained in the document issued while rendering service is to provide information regarding the registration number and details of service provider details, details of service recipient, description and value of taxable service, and the service tax payable thereon. If the documents provide these necessary particulars, merely because the documents are debit notes the refund cannot be denied at the end of the service recipient.

Holding that the rejection of refund was unjustified, the appeals were allowed with consequential relief.

(See 2015-TIOL-2241-CESTAT-DEL)


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