Computerized invoices downloaded through internet are eligible documents for claiming Refund of Service tax paid on services used for export provided it contains all relevant details
Suncity Art Exporters (the Appellant) were exporters of handicrafts and were entitled to Refund of Service tax paid on the various specified input services in terms of Notification No. 17/09-ST dated July 7, 2009. Accordingly, the Appellant filed Refund claims in respect of various input services like shipping and forwarding agent services, CHA services, terminal handling services, bill of loading services, documentary charges and transportation by rail etc.
The Refund claims of the Appellant were denied by the Department on various grounds:
- In some cases, Refund was rejected for non-submission of original invoices raised by the service providers. In this regard, the Appellant relying upon the decision in the case of CCE Gokul Refoils & Solvents Ltd. [(2013) 42 GST 137/32 taxmann.com 245 (Ahd.)] and Creative Architects & Interiors in Order Appeal No. 213/2011 (M-ST), dated December 2, 2011, submitted that the said invoices contained all the details like container number or shipping bill number, bill of loading number etc., and fully establishes the availment of input service used in the export of the goods;
- A part of the Refund claim was denied on the ground that the various services provided by the persons at the port like bill of loading charges, documentary charges, REPO charges etc., cannot called to be port services as also on the ground that the service providers are not registered under the port services category, but are registered under different categories;
- The Refund claim of Service tax paid on CHA services/ clearing and forwarding agent services was denied on the ground that the invoices issued do not mention the goods. The Appellant argued that the said invoices have cross reference to either invoice number or the shipping bill number and/ or container number and from the said cross references the description of the goods can be found out;
- A part of the Refund was denied on the ground that CHA has charged other charges which do not fall under the CHA services and as such the Service tax paid by the CHA cannot be allowed as refund;
- In some cases, the Refund claim was denied on grounds such as describing the transportation of the goods by road in Refund application, whereas the actual transportation was rail, the claim was filed under the category of THC instead of CHA etc.
Being aggrieved, the Appellant preferred an appeal before the Hon’ble CESTAT, Delhi.
The Hon’ble CESTAT, Delhi held the following:
- Denial of refund of Service tax on the ground of downloaded invoices is not in consonance with the precedent decisions as also in terms of the Board Circular No. 112/6/2009-ST dated March 12, 2009. Hence, the Department was directed to verify the Appellant’s refund claim afresh;
- Any services provided on the port are ‘port services’. Further, Refund cannot be denied on the ground that service providers are not registered for any particular service. Thus, the Department was directed to examine the Appellant’s refund claim and verify the same from the documents and decide the Refund claim accordingly;
- Denial of Refund claim on ground of invoices not containing reference to goods was also set aside with directions to the Department to undertake the necessary exercises for cross reference of the invoices with the description of the goods;
- In as much as and as long as the CHA paid the Service tax on the entire consideration under the category of CHA services, the service recipient would be entitled to the benefit of the same. When no objection as to classification was raised by the Revenue at the time of collection of Service tax from the CHA, allowing them to raise such an objection at the time of grant of Refund would be against the principles of justice;
- Inadvertent mistakes like stating transport by road instead of by rail, filing refund claim as THC rather than as CHA, having occurred in the hands of the person preparing the Refund claim, cannot result in denial of Refund, if otherwise due to the assessee on merits.
Accordingly, the matter was remanded back to the Department for examining the Appellant’s Refund claim afresh, in the light of the law declared by the Tribunal in various decisions and also after verification of the documents, without raising technical and procedural issues.
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: firstname.lastname@example.org)
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