2018 (7) TMI 1217 – CESTAT MUMBAI – TMI – Refund of Service Tax paid – export of output service – Rule 5 of the CCR 2004 read with N/N. 27/2012-C.E.(N.T.) dated 18.6.2012 – denial of refund on account of nexus – Held that:- The fact is not under dispute that the appellant provides the entire output services to its overseas clients and none of the output services were provided to the clients within the country. Thus, it cannot be said that the input services, on which refund benefit has been sought, were not utilized for providing the exported output service.
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The amended provisions of Rule 5 of the rules have also been clarified by the Tax Research Unit of Department of Revenue vide Circular dated 16.3.2012. It has been stated therein that the nexus between the input service used in export of service should not be insisted upon and the benefit of refund should be granted on the basis of ratio of export turnover to total turnover demonstrated by the assessee.
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As per the sta
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ubject matter of present disputes. The appellant had filed refund claim in terms of Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No.27/2012-C.E.(N.T.) dated 18.6.2012. The refund applications filed by the appellant were denied by the original authority on the ground that the input services on which the refund benefit been sought, have no nexus with the output service exported by the appellant. 3. The learned Advocate appearing for the appellant submits that the output services provided by the appellant were entirely exported and no services were provided by it to the service recipients located within the country. Thus, he submits that since the disputed services were used in entirety for providing output service exported by the appellant, the refund of service tax paid on the disputed services should be available under Rule 5 of the Rules read with Notification dated 18.6.2012. He also referred to the Circular dated 16.3.2012 issued by the Tax Research Unit of Departm
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ght, were not utilized for providing the exported output service. While presenting the Union Budget for the year 2012, the Finance Minister in the floor of Parliament had clarified the legislative intent in granting refund of service tax and for that purpose, had conveyed that voluminous documentation cannot be insisted upon for verification by the Department. The relevant paragraph in the Budget speech is extracted herein below:- 173. While the problems faced by exporters of goods with respect to taxes on input services was addressed earlier this year, disbursement of taxes that go into the export of services has been an irritant for long. I now announce a new scheme that will simplify refunds without resorting to voluminous documentation or verification. As an added incentive, such refunds will also be admissible for taxes on taxable services that have been exempted. 7. Further, I also find that the amended provisions of Rule 5 of the rules have also been clarified by the Tax Researc
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