2011 (11) TMI 524 - AT - Service Tax

Refund - Notification No.41/2007-ST - ld.Counsel submitted that the Notification No.17/2009, dt.7.7.09 in Sr.No.16 of the table has covered the terminal handling charges. According to Sr.No.16, the Service Tax on services which are commonly known as terminal handling is admissible and it is also indicated that classified under any sub-clause of clause (105) of Section 65. - Held that the appellant has not been able to make out a prima facie case in their favour and therefore is required to deposit the amount. No financial difficulty is pleaded - Decided against the assessee by way of direction to deposit the demand

Summary

Issues involved:
1. Refund of Service Tax on terminal handling charges denied.
2. Interpretation of Notification No.41/2007-ST for refund eligibility.
3. Applicability of Notification No.17/2009 to terminal handling charges.
4. Requirement to deposit the demanded amount under Section 35F.

Analysis:
The appellant sought a refund of Service Tax paid on terminal handling charges to the Customs House Agent (CHA) for the period of October 2008 to December 2008, amounting to Rs.62,668. The refund was denied based on the argument that terminal handling charges were not covered under Notification No.41/2007-ST, which specifies services eligible for refund on exported goods. The Commissioner, in an order passed under Section 84, concluded that the Service Tax paid on terminal handling charges was not a notified service. The invoices from the CHA indicated separate charges for terminal handling and documentation, without specifying the classification of terminal handling charges under any service. The Tribunal emphasized that unless terminal handling charges were a notified service or part of the Port service, a refund could not be granted.

During the hearing, the appellant's counsel referred to Notification No.17/2009, dated 7.7.09, specifically Sr.No.16, which covered terminal handling charges as admissible for Service Tax. The counsel argued that this should be read in conjunction with Notification No.41/2007-ST and treated as clarificatory. However, the Tribunal found this argument unconvincing, noting that Notification No.17/2009 had superseded Notification No.41/2007-ST, making it impossible for the former to clarify the latter. Consequently, the Tribunal held that the appellant failed to establish a prima facie case in their favor, requiring them to deposit the demanded amount under Section 35F of the Central Excise Act, 1944, applicable to Service Tax matters under Section 83 of the Finance Act, 1994.

In conclusion, the Tribunal directed the appellant to deposit the demanded amount within eight weeks from the judgment date, with a compliance report due on 06.02.2012. The decision underscored the importance of adhering to the specific provisions of notifications governing Service Tax refunds and highlighted the necessity for clear classification and notification of services for refund eligibility.