The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the rejection of refund on flimsy ground would defeat the purpose of rebate schemes and the same will trap the exporters under unnecessary litigations.
The assessee, M/s Sethia Oils Ltd, an Exporter, was aggrieved by the order of the Commissioner (Appeals) holding that the exporter should be registered with the Export Promotion Council and registered with “The Solvent Extractors’ Association” of India, which is a Trade Promotion organization (TPO) and in the absence of such condition, the assessee cannot avail the benefit of Notification No.41/2012-ST dated 29.06.2012.
After hearing rival contentions from both sides, Shri P. K. Choudhary (Judicial Member) observed that there is no dispute as to the fact that the goods were exported by the appellant-assessee.
“Once it is not in dispute that the services are specified for refund purpose, and since Service Tax was actually paid on specified services pertaining to export activity, in terms of the broad scheme of refund under Notification No. 41/2012-S.T. (supra) as amended with clarifications, the refund must be granted to the exporter. It is my considered view that the order passed by the Learned Commissioner (Appeals) cannot be sustained as a substantive benefit should not be denied to an assessee if the conditions are fulfilled. It would not be out of place to mention that the sole intention of the Government to bring out these rebate schemes is to promote the Indian exporters to enjoy a level playing field and to compete with the exporters of other countries in the global market. Further, it is not the intention of the Government to export taxes, hence after much research, these schemes have been notified and if the refund claims are rejected on such flimsy grounds, it defeats the very purpose of rebate schemes and traps the exporters under unnecessary litigations,” the Tribunal said.
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