2011 (2) TMI 369 - AT - Service Tax

Refund - notification No. 41/2007-ST dated 06.10.2007 - export of goods - classification or re classification of services to claim refund - Held that - It is a settled law that re-classification of the services cannot be done at the recipient s end. Therefore lower authorities should have examined the invoices and other documents and have seen whether service tax was paid under the relevant budget head for payment of service tax in respect of Port services or not. - matter remanded back for re-consideration and re-examination.

Summary

Issues:
1. Rejection of refund claim for service tax paid on services utilized in export under notification No. 41/2007-ST.
2. Classification of services like terminal handling charges, documentation fee, courier services, CHA services, and GTA services under the notification.
3. Rejection of refund claims based on incorrect classification of services.
4. Re-examination of refund claims for THC and CHA services.

Analysis:
The judgment deals with an appeal against the rejection of a refund claim for service tax paid on services utilized in the export of goods under notification No. 41/2007-ST. The lower authorities rejected the refund claims citing incorrect classification of services by the appellant. Specifically, services like terminal handling charges, documentation fee, courier services, CHA services, and GTA services were deemed not covered under the notification, thus denying the refund entitlement.

The appellant argued that the CHA services were wrongly rejected based on the service provider's registration under C&F services. However, the appellant presented a registration certificate indicating the service provider was a CHA. Similarly, for courier services, the rejection was due to missing details on invoices, but the appellant contended that the notification did not require additional details beyond what was provided. The absence of documentary evidence regarding the notification was noted by the tribunal.

Regarding GTA services, the refund claim was also rejected on similar grounds. For terminal handling charges, the authorities questioned the registration numbers of service providers and their authorization by the Port. The tribunal emphasized the importance of verifying if service tax was paid under the correct category and highlighted that re-classification of services should not be done at the recipient's end. The tribunal directed the lower authorities to re-examine the refund claims for THC and CHA services, as there was ambiguity regarding the payment of service tax under the appropriate category.

In conclusion, the judgment emphasized the need for a re-examination of refund claims for THC and CHA services due to discrepancies in the classification of services and the payment of service tax. The matter was remanded to the original adjudicating authority for reconsideration based on the observations made by the tribunal to ensure a lawful decision in accordance with the law.