CESTAT Allows Refund Claim of Paid Service Tax on Ground of Service Rendered and Received Outside India [Read Order]

The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed the claim of refund of the paid service tax by the assessee on the ground of service rendered and received outside India. 

Sharda Cropchem Ltd, the appellant assessee was engaged in the marketing and sale of agrochemicals in overseas markets as a merchant trader and used to purchase goods from one country and sell the same to another country without bringing such goods to India. 

The assessee appealed against the order passed by the Commissioner (Appeals) for rejecting the claim of refund of paid service tax claimed by the assessee. 

Anurag Mishra and Ashwini Kumar, the counsels for the assessee contended that the assessee filed a claim for a refund of the entire service tax along with interest paid by them on the ground that the services were rendered outside India and also were received outside India therefore the assessee was not liable for service tax in terms of the provisions of Section 64 of Finance Act, 1994. 

Further submitted that the first premises based on which refund sanctioning order dated were reviewed by the jurisdictional Commissioner stating that the assessee had used services for their business of import and export inside India was factually incorrect. 

Nitin M. Tagade, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee received and provided services inside India and the Residence of the assessee was also inside India, thus the assessee was liable to pay service tax and not eligible for refund. 

The Bench observed that from the sample invoices submitted additionally by the assessee to the agents employed by the assessee in foreign countries and the service providers, all payments were made in foreign exchange from the assessee’s foreign exchange account and the assessee had not claimed any benefit under Foreign Trade Policy or as a deemed exporter generating foreign exchange for India. 

The two-member bench comprising Suvendu Kumar Pati (Judicial) and Anil Shakkarwar (Technical) quashed the order passed by the Commissioner (Appeals) and allowed the refund while confirming the order of the Refund Sanctioning Authority. 

To Read the full text of the Order CLICK HERE

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