2011 (10) TMI 63 - AT - Service Tax

Refund claim - GTA service - denied a refund - without transporting the empty containers, there cannot be any export since the stuffing can be done only in the empty container - in relation to would cover the empty containers also and in any case, the empty containers have to be transported and further brought back to the Port area or ICD - service tax was paid on detention charge levied on the containers by transporter - Held that - refund allowed on the transportation of empty containers and detention charge with consequential relief to the appellant. - decided in favor of assesse.

Summary

Issues:
1. Denial of refund for GTA service.
2. Denial of refund on the ground of payment for transportation of empty containers.
3. Denial of refund on the ground of payment for detention charge on containers.
4. Disallowance of a specific amount due to lack of details on lorry receipts.

Analysis:
1. The appellant was denied a refund of Rs.55,888/- for GTA service. The refund was rejected based on three grounds. The first ground was the payment of service tax for transporting empty containers to the premises for outward transportation. The appellant argued that the transportation of empty containers is essential for exports and falls under the purview of refund as per Notification No.41/2007-ST. The Tribunal agreed with the appellant's submissions, emphasizing that the words 'in relation to' cover activities related to transportation, including empty containers necessary for transport of export goods.

2. The second ground for denial of refund was the payment of service tax on detention charges levied on containers by the transporter. The Tribunal noted that the detention charges are incurred during the utilization of containers for transportation, which may experience delays for various reasons. Referring to Section 67 of the Finance Act, 1994, it was established that the service tax paid by the GTA service provider on the gross value collected was in compliance. The Tribunal clarified that the total value of services cannot be segmented at the receiver's end, emphasizing the payment of service tax under the GTA head.

3. An amount of Rs.2,969/- was disallowed due to insufficient details on lorry receipts regarding export goods. During the hearing, the appellant's counsel acknowledged the lack of details but opted not to pursue the matter due to the minimal amount in question. Consequently, the Tribunal allowed the appeal concerning the refund denial on transportation of empty containers and detention charges, providing consequential relief to the appellant.

This judgment highlights the Tribunal's interpretation of the legal provisions governing service tax refunds for transportation services, emphasizing the broad scope of activities covered under 'in relation to' and the necessity of complying with tax payment regulations for service providers.