2018 (7) TMI 1217 - AT - Service Tax

Refund of Service Tax paid - export of output service - Rule 5 of the CCR 2004 read with N/N. 27/2012-C.E.(N.T.) dated 18.6.2012 - denial of refund on account of nexus - Held that:- The fact is not under dispute that the appellant provides the entire output services to its overseas clients and none of the output services were provided to the clients within the country. Thus, it cannot be said that the input services, on which refund benefit has been sought, were not utilized for providing the exported output service.

The amended provisions of Rule 5 of the rules have also been clarified by the Tax Research Unit of Department of Revenue vide Circular dated 16.3.2012. It has been stated therein that the nexus between the input service used in export of service should not be insisted upon and the benefit of refund should be granted on the basis of ratio of export turnover to total turnover demonstrated by the assessee.

As per the statutory mandates read with clarification furnished by TRU, rejection of refund benefit by the authorities below cannot be sustained for judicial scrutiny.

Refund cannot be denied - appeal allowed - decided in favor of appellant.