The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) bench of New Delhi has granted absolute exemption from the liability to pay Service Tax on Goods Transport Agency (GTA) services where the recipient is liable to pay.
The bench headed by Dr. Ajaya Krishna Vishesha ( Judicial Member) observed that a person who pays service tax under Section 68 of the Finance Act, 1994 will not be eligible to claim refund.
The appellant/ assessee filed refund claims for service tax paid on GTA services which were used for the purpose of export of excisable goods. The claim was rejected by the Assistant Commissioner, Central Excise- Junagadh. The Commissioner ( Appeals) also affirmed the view taken by the Assistant Commissioner. Thus, the appeal was filed before the tribunal.
The appellant / assessee argued that if exported has paid service tax as recipient of service, he is not eligible for refund. But, if service tax is paid for service utilized for export of goods, then refund should not be denied. Reliance was also placed on several Service Tax notifications and Section 68 of the Finance Act, 1994 to contend that the intention of the legislature is to allow refund of service tax paid by exporter on GTA services.
The department, on the other hand, contended that the impugned order has been passed in accordance with notifications and provisions contained in the Finance Act, 1994.
The bench observed that as per notification 41/2012- ST and Section 68 of Finance Act, no rebate can be claimed by the person liable to pay service tax. As far as GTA services are concerned, the exporter is paying service tax by virtue of Notification 30/2012- ST. Reliance was further placed on Notification 31/2012- ST to observe that an absolute exemption has already been granted separately on receipt of GTA services. Hence, the benefit of rebate cannot be availed by the appellant / assessee..
The bench also considered the decision in Nahar Industrial Enterprises 2015 (38) STR 256 (Tri. Delhi) wherein the refund of service tax paid on freight on transportation of goods for export from factory to port of export involved under Section 68 (2) of the Finance Act was not eligible as per Notification 17/2009- ST. Thus, it was held that no irregularity has been committed by the Commissioner (Appeals) in passing the impugned order. Consequently, the appeal was dismissed.
Case Details
Case title: Perfect Coke Pvt. ltd. vs Commissioner of Central Excise and service
Case No: Service Tax appeal 12140 of 2016
Date of decision: 25.03.2025
Counsel for Appellant: Shri Divyesh P sodha, CA
Counsel for Respondent: Shri P Ganeshan
