2013 (12) TMI 491 - AT - Service Tax

Rejection of refund claim - Port services - Claim rejected for Stevedoring and documentation charges - Notification No. 17/2009-S.T., dated 7-7-2009 - port service is one of the services notified under Notification No. 17/2009-S.T. There is also no clear cut finding that Service Tax has not been paid by the service provider under the category of port services. Certificates which were produced show that the service provider was registered under port services category. Further, the service provider was authorized to provide services in Navlakhi port for providing services for stevedoring and documentation. Though the services are provided in the category of port services, the finding is that in reality it is cargo handling services and there is no service tax liability. If it was felt that the service tax was not payable, but paid action was required to be taken at the end of service provider - service tax has been paid under the category of port services, denial of service tax cannot be sustained - Decided in favour of assessee.

Summary

Issues: Rejection of refund claims for Service Tax paid on Stevedoring and Documentation charges under Notification No. 17/2009-S.T.

Analysis:

Issue 1: Rejection of refund claims based on charges not specified in the notification.

The Original Adjudicating Authority rejected the refund claims stating that stevedoring and documentation charges were not specified in Notification No. 17/2009-S.T. The Authority referred to a High Court decision categorizing stevedoring under 'Cargo Handling Services' and not 'port services'. However, the Tribunal noted that the focus should be on whether service tax was paid under the notified category, which in this case was 'port services'. The Tribunal found that the service provider was registered under port services, authorized to provide services in a specific port, and had paid service tax under the port services category. Since there was no dispute regarding payment under the correct category, the denial of the refund was deemed unsustainable.

Issue 2: Classification of services and liability for service tax.

The lower authority had considered the classification of services provided by the service provider and denied the refund. However, the Tribunal emphasized that the crucial factor for refund consideration is whether service tax was paid under the correct category as per the notification. Despite the argument that the actual services provided were cargo handling services, the Tribunal reiterated that as long as service tax was paid under the notified 'port services' category, the denial of refund could not be upheld. The Tribunal clarified that if there were concerns about the tax liability, action should have been taken against the service provider, but for the purpose of refund, compliance with the notification was the determining factor.

Conclusion:

The Tribunal allowed all appeals, providing consequential relief to the appellants, as it found that service tax had been paid under the category of 'port services' as per Notification No. 17/2009-S.T. The Tribunal emphasized the importance of focusing on the category under which service tax was paid rather than the actual nature of services provided.