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Exporter of goods — Claimed refund of service tax paid on the technical testing and analysis service used in export of goods — No written agreement between parties — Exemption denied — Challenged by the appellant — Held that liberal view has to be taken for interpretation to reduce the cost of the goods exported — Taxes cannot be exported.
Facts:
The appellant filed a refund claim of service tax paid on the technical testing and analysis service, essentially used for export of goods claiming benefits under Notification No. 41/2007 as amended.
The refund claim was rejected on the ground that the condition mentioned in the Notification that there should be a written agreement with the buyer was not satisfied. However, the appellant contended that the letter of credit submitted by them can be issued by the bank only on the instructions of the customer.
Ratio in the case of Commissioner of Service Tax, Delhi v. Convergys India P. Ltd., (2009) 16 STR 198 was relied upon by the appellant, wherein it was held that a liberal view should be taken in similar cases pertaining to exports.
Held:
It was held that the refund claim cannot be rejected only on the grounds that the exporter had no written agreement for the mentioned input service with the buyer. Non-fulfilment of the procedure cannot lead to denial of the benefits under the beneficial legislation provided for exports. It is settled law that taxes cannot be exported, hence the appeal was allowed.
