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Delhi HC: Service Tax Rebate for Input Services Cannot Be Denied After Export Sales Remittances Received

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Published on: 29 September 2023 at 15:05 IST

The Delhi High Court has dismissed an appeal by the Commissioner of Customs, affirming that exporters can amend their shipping bills to claim a service tax rebate (STR) even if they didn’t declare the claim at the time of export, provided they possess all relevant documents without deficiencies.

In a case involving the export of gold jewelry and medallions, the respondents sought to amend their shipping bills to include the STR claim declaration.

The Adjudicating Authority initially denied these amendments, stating that they could only be allowed if the required documents existed at the time of export. Subsequent appeals to the Commissioner of Customs (Appeal) were also rejected.

The respondents then filed second appeals, leading the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) to rule in their favor. CESTAT held that the applicability of Section 149 of the Customs Act, which pertains to the amendment of documents, is based on whether documentary evidence existed when the goods were exported.

The Delhi High Court examined Section 149 of the Customs Act and found that it did not specify a time limit for amending documents to seek rebates or benefits. Furthermore, it did not outline specific grounds for requesting amendments.

The section allows proposed amendments supported by documentary evidence that existed at the time of export.

In this case, the respondents had submitted all relevant documents containing the necessary information along with their request letters for amendment.

The Proper Officer had not served any notices pointing out deficiencies in the documents. Therefore, the High Court concluded that there was no legal issue or incorrect approach in granting the respondents the STR benefit based on their exports during the relevant period.

Case title: “Commissioner of Customs V. M/s M.D. Overseas and Ors.”