2016 (11) TMI 1481 - AT - Service Tax

Refund claim - various input services - denial on the ground that the services do not fall within the scope of Port Services - Held that - irrespective of the taxable service, if the same are provided within the port for exportation of goods, the refund claim can be processed in terms of the N/N. 41/2007 dated 06.10.2007 - refund claim denied by the authorities below on the disputed services namely, inland Haulage charges, Freight outward charges, BL charges and CHA charges is not in conformity with the provisions of the Notification dated 06.10.2007 and to that extent the impugned order is set aside - appeal allowed. Refund claim - fumigation charges - denial on the ground that the appellant had not produced the written agreement entered with the overseas buyer for providing such service - Held that - Since the ld. Advocate concedes that the agreement has been entered into and the same is available with the appellant, I am of the view that the matter should go back to the original authority for verification of the agreement entered into by the appellant with its overseas buyer - matter on remand. Appeal allowed in part and part matter on remand.

Summary

Issues:
Refund of service tax paid on various taxable services for export of goods; Denial of refund on grounds of services not falling within the scope of Port Service; Rejection of refund claim for fumigation charges due to lack of produced agreement with overseas buyer.

Analysis:
The appeal challenged an order by the Commissioner of Customs and Central Excise (Appeals), Jaipur regarding the refund of service tax paid on various taxable services used for exporting goods. The appellant, engaged in manufacturing PVC Insulated Wires and Cables, sought a refund of ?1,91,860 under Notification No.41/2007-ST dated 06.10.2007. The Department denied the refund, contending that the services utilized for exportation did not fall under Port Service and rejected the claim for fumigation charges due to the absence of a written agreement with the overseas buyer.

During the appeal, the appellant's advocate argued that services used within the port for exportation should be eligible for refund as per the notification. Citing precedents like SRF Ltd. vs. CCE, Jaipur and others, the advocate highlighted the importance of agreements with overseas buyers for services like fumigation. The Department reiterated its stance as per the impugned order.

Upon review, the Tribunal found that the disputed taxable services were indeed used for exporting goods and payments were made to service providers. The denial of refund based on services not meeting the definition of Port Service was deemed incorrect. Referring to the cited decisions, the Tribunal ruled that if services were provided within the port for exportation, the refund claim should be processed under the relevant notification. Consequently, the denial of refund on services like inland Haulage charges, Freight outward charges, BL charges, and CHA charges was set aside, and the appeal was allowed in favor of the appellant.

Regarding fumigation charges, the Tribunal noted the absence of the agreement with the overseas buyer. However, acknowledging the advocate's claim that such an agreement existed, the matter was directed back to the original authority for verification. If the appellant could produce the written agreement, the refund benefit for fumigation charges should be extended.

In conclusion, the Tribunal set aside the denial of refund on certain services for export and directed further verification for fumigation charges based on the availability of the agreement with the overseas buyer.