The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the denial of the service tax refund claim made on receipt of reimbursement from overseas importer.
The appellant, M/s. Kalpataru Agroforest Enterprises Pvt. Ltd, has exported fly ash to Nepal and claimed refund claim of service tax paid by them for the freight charges incurred in these exports. The appellant has filed refund claim of service tax and both the authorities have rejected the refund claim on the ground that the appellant has received the reimbursement for the railway freight from the overseas importer. Being aggrieved by the same, the appellant has filed the present appeal before the Tribunal.
The Counsel for the appellant submitted that the appellant has realized the total value from the overseas importer which is inclusive of the freight charges paid to the railways on account of these exports. However, what is being claimed as refund is the service tax paid by the appellant on such freight charges.
The Counsel further went on to state that it is seen from the records that appellant has not sought any reimbursement or payment from the overseas importer for the service tax paid by him. Therefore, in these two cases, it is clear that the appellant has borne the service tax portion paid by them.
A Single Bench of the Tribunal comprising R. Muralidhar, Member (Judicial) held that “Considering the above factual details, I feel that the Lower Authorities have erred in rejecting the refund claim on the ground that Appellant has received reimbursement from the overseas importer. As the Appellant has borne the Service Tax component himself, I hold that he is entitled to get refund.”
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