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May 2011

(2011) 21 STR 668 (Tri.-Mumbai) — CBAY Systems (India) Pvt. Ltd. v. Commissioner of CCEx, Mumbai

By Puloma Dalal, Jayesh Gogri Chartered Accountants
Reading Time 1 mins
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Appellants claimed refund of service tax on services used in export of goods under Notification No. 41/2007-S.T. — Exemption/refund denied on the ground that appellants not registered under Business Auxiliary service — Denial of refund not sustainable.

Facts:
The appellants utilised certain services for export of goods and claimed refund of the service tax on such services under Notification No. 41/2007 S.T. The refund claim was denied on the ground that the appellants were not registered under the category of ‘Business Auxiliary Service’.

Held:
CBEC has issued clarification, in the circular dated 12-3-2009, in regards to the above-mentioned issue stating that Notification No. 41/2007-S.T. provides exemption by way of refund for specified services used for export of goods. Granting refund to exporters, on taxable services that he receives and uses for export do not require verification of registration certificate of the supplier of service. Therefore, refund should be granted in such cases. The procedural violations by the service provider needs to be dealt separately. Accordingly, the denial of refund claim on the ground that the appellants were not registered under the ‘Business Auxiliary Service’ was not sustainable and the appeal was allowed.

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