2016 (7) TMI 1279 - AT - Service Tax

Refund claim - transportation services - denial on the ground that these are reimbursable charges and not related to the composite nature of activities undertaken by the customs house agent - N/N. 17/2009-S.T., dated 7th July, 2009 - Held that - The Tribunal in Commissioner of Central Excise, Ahmedabad v. Dishman Pharma & Chemicals Ltd. 2010 (10) TMI 355 - CESTAT, AHMEDABAD has held that refund is not deniable merely because bills have been raised by issuer registered as provider of a different taxable service - these lorry receipts, not having been subject to scrutiny, are required to be verified - Appellant uses road transport service for delivery of export goods to the port of loading and the charge includes the tax liability discharged by the agent on behalf of appellant. There can be no doubt that this tax is eligible to be refunded - appeal allowed by way of remand.

Summary

Issues:
1. Denial of refund of tax paid on charges by customs house agent.
2. Disallowed claims for refund of tax on terminal handling charges, documentation charges, and transportation charges.
3. Disagreement on the rationale for disallowing refund claims.
4. Non-admissibility of claim for refund of tax on transportation services.
5. Verification of lorry receipts for transportation bills.

Analysis:

Issue 1: The appellant, M/s. Hindalco Industries Ltd., appealed against the denial of refund of tax paid on charges levied by the customs house agent. The original authority disallowed claims totaling &8377; 2,40,819, relating to terminal handling charges, documentation charges, and transportation charges. The dispute was narrowed down to the latter two charges totaling &8377; 1,06,652.

Issue 2: It was acknowledged that the appellant had discharged tax liability on input services related to exports. The customs house agent billed the appellant for end-to-end services, including documentation charges and transportation costs to the port of loading. The first appellate authority considered these charges as reimbursable and not connected to the composite activities of the agent.

Issue 3: The tribunal disagreed with the rationale of the first appellate authority. It was argued that once the service provider had discharged the tax liability on the services eligible for refund, there was no basis to deny the refund claim based on the breakdown of charges. The appellant was deemed eligible for a refund of &8377; 60,821 related to documentation charges.

Issue 4: Regarding the non-admissibility of the claim for refund on transportation services, the first appellate authority pointed out the absence of lorry receipts. The appellant used road transport services for delivering export goods, and the tax liability was included in the charges. The tribunal cited a precedent to support the eligibility of such refunds, emphasizing the need for verifying lorry receipts to compute the refund accurately.

Issue 5: The tribunal directed the original authority to verify the lorry receipts related to transportation bills raised by the customs house agent and to allow the refund accordingly. The appeal was disposed of in favor of the appellant after addressing the issues raised.

This comprehensive analysis of the judgment highlights the key issues, arguments presented, and the tribunal's decisions, providing a detailed overview of the legal proceedings and outcomes.