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Johnny and Service Tax Refund Part - IV
By: -                          
CA. Pradeep Jain    
Siddharth Rutiya
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To prolong the series of the articles on Refund claims to exporters we here under this article are expressing the miserable situation of exporters claiming refund claims for service tax paid on services used in export of goods. This is the fourth article in a row of this series of articles. In the previous three articles we had elaborated the difficulties faced by the assessees in getting the refund claim under GTA service, Port services and Technical testing and analysis services.
In this fourth article we are attempting to present the grounds on which departmental authorities are disallowing the refund claims as related to Specialized cleaning services (namely disinfecting, exterminating, sterilizing or fumigating of containers) availed by the exporters (Section 65[105][zzzd]). This complete state of affairs is humorously picturisead by the way of poems and conversation between Johnny (an assessee) and his father. This Endeavour is just to bring out the problems faced by exporters.
Johnny and Jill went up the hill, to get the refund order
Johnny came back with a lack
And Jill came hopeless after.

The assesses claiming refund orders under Specialized cleaning services are facing vast difficulties in getting their refund orders passed on pointless and unimportant justifications that not only are harassing the assessees but also deprives away the faith of assessees on the refund mechanism. These enormous reasons on which the department is refusing the refund claims on the said services are being projected hereunder as follows: -
Johnny-Johnny!  Yes papa!
Got the refund?
No Papa,
Telling lies?
No Papa,
What’s the reason?
This papa: -
Johnny says: I went to the department to get the refund for Courier service but department said: -
Johnny-Johnny go away,
Come again another day.
Your refund order has following Flay: -
The refund claim was not accompanied along with the written agreement as regards the said service. This is one of the pre conditions for availing the benefit of refund claim.
Johnny’s View: 
The requirement of written agreement is simply a formal requirement that can be avoided as it is a fact that if there are any statutory requirements of the Foreign law for specialized cleaning of containers, then we the assessees are unable to evidence the same to your good honour and hence there can’t be any written agreement in such respect. But as this service is related to the export of goods the refund should be granted.
Further, it is a set philosophy that no exporter will carry out the Specialized Cleaning service until and unless there is a requirement of same from the foreign buyers. This further clarifies the situation and makes it clear that the said requirement of submitting the written agreements is just a presupposed condition which can be avoided. But the department does not agree. Even it was argued that this requirement has been dispensed with new set of Rules effective from 06.07.2009. This has been down on our representations. This shows the intention of the Government. It is laid down principle that the beneficial notifications should have retrospective effect. But the department does not agree and says that it is clearly written in the notification that it is applicable from the date of notification and as such the requirement is relaxed from 06.07.2009 only.
Johnny says: I went to the department next day again with the corrections but department said: -
Johnny-Johnny go away,
Come again another day.
Your refund order has following more flay: -
There is no evidence from the enclosures of the refund claim and other documents that the refund of Specialized cleaning service as claimed by you is accredited by a competent statutory authority.  This is a specific requirement in the notification. As you have not enclosed the certificate and it seems that the Specialized cleaning services as availed by you is from an agency not accredited by the competent statutory authority to provide such specialized cleaning. Even the relaxation from this condition is also applicable from 06.07.2009. Now, the agency is having its office in other city and as such it will take time to get certificate does not hold good in the era of fast communication. Moreover, your argument that fumigation done by this agency is acceptable to foreign countries does not hold good when there is specific requirement in the notification then you should produce the certificate.
The refund claims are allowed in respect of such service only when these are provided by a person who is validly accredited by the competent statutory authority and the said services are used in export of goods. This must be further evidenced by a valid certificate which must be enclosed along with the refund claim.
Johnny says: I went to the department next day again with the further corrections but department rejected saying: -
Johnny-Johnny go away,
You won’t get refund anyway.
It has following more flay: -
The invoices issued by the Specialized cleaning agency do not fulfill all the requirements specified under Rule 4A like category of service, Description of service, valid Invoice Number, Service tax rate, Service tax registration number and other alike things. The debit note issued by agency without service tax registration and category of service are not valid duty paying document and as such the refund is not admissible. Further, your argument that these are rectifiable defects and you have amended the same is not acceptable. As the document should be proper and valid document.
Johnny’s view: -
The view taken by the Department is stringent in applying the legal language as provided under Rule 4A, whereas the department should adopt a liberal view in this regard, more to in the case of Rule 4A of Service tax rules requirements. Non compliance of the requirements specified under Rule 4A, does not lead to a severe impact and there should be a practice on the part of departmental authorities to avoid allegations if the Rule 4A is not complied in its entirety. Henceforth, the allegation of the department is futile for disallowance of refund claim.
Fruitless again & again;
Johnny now in grief and pain!
Refund order now a dream;
His efforts have downstream!
By the virtue of this scenario picturiazed above the exclusive attempt is to bring into lime light the problems faced by assesses in getting the refund order as against the cleaning services. To represent the whole situation and to make it somewhat rhythmatic we have graced the article with humorous poems and conversation between Johnny and his father.
There are a number of services on which the refund is allowed. The assessee is facing difficulty in almost all of those services. Due to the large number of services we were not able to cover all the services in this article and hence we will be bringing further articles on the different services covered therein. Keep visiting for the next article……..

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Pradeep Jain
Category Service Tax   Report

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