2016 (7) TMI 1357 - AT - Service Tax

Refund claim - N/N. 41/2012-ST dated 29.06.2012 - Held that - since the taxable services were utilized by the appellant for movement of goods between the factory and the port of export and not used beyond the place of removal denial of refund benefit by the authorities below are in conformity with the Not. dtd. 29.06.2012 - in view of the retrospective amendment of the Not. dtd. 29.06.2012 vide No.1/2016 dated 03.02.2016 and the clarification contained in Section 160 of Finance Act 2016 refund benefit should be available to the appellant - matter is remanded to the original authority for re-consideration of the issue - appeal allowed by way of remand.

Summary

Issues:
Refund claim under Notification No.41/2012-ST dated 29.06.2012 for service tax paid on taxable services used in connection with the export of goods.

Analysis:
The appellant, engaged in manufacturing excisable goods, filed a refund application for service tax paid on taxable services used for exporting goods. The original authority rejected the refund application, stating that the disputed taxable services did not fall under the definition of 'specified services' as per the Notification dated 29.06.2012. The Ld. Commissioner (Appeals) upheld the original order. The appellant appealed to the Tribunal.

The appellant's advocate argued that an amendment to Notification No.41/2012 was made through Notification No.1/2016-ST, which allowed taxable services used beyond the factory to be eligible for refund. The advocate contended that this amendment should apply retrospectively as per Section 160 of the Finance Act, 2016.

The respondent's representative supported the findings of the impugned order. After hearing both sides and examining the records, it was noted that the Notification dated 29.06.2012 provided for a rebate of service tax on taxable services used for exporting goods. The Notification clarified that taxable services used beyond the place of removal for exportation should qualify as 'specified services.'

In this case, the taxable services were used for moving goods between the factory and the port of export, not beyond the place of removal. Therefore, the denial of refund benefit by the lower authorities was deemed consistent with the Notification. However, considering the retrospective amendment of the Notification dated 29.06.2012 through No.1/2016 dated 03.02.2016 and the provisions of Section 160 of the Finance Act, 2016, it was concluded that the refund benefit should be available to the appellant.

As the amended Notification and the Finance Act were not in effect when the impugned order was issued, the matter was remanded to the original authority for reconsideration in light of the amended Notification dated 03.02.2016. The appellant was to be given a personal hearing before a fresh decision was made. The appeal was allowed by way of remand.