2015 (11) TMI 1415 - AT - Service Tax

Denial of refund claim - use of Technical Testing Services in export of goods - Held that - there is no doubt that the said service was used in relation to exported goods and such testing was required to be done as per the written agreement with the buyers and also the said service is duly covered under Notification No.41/2007-ST, dated 06.10.2007 and therefore we fail to comprehend the ground on which the Revenue considered this amount of refund to be inadmissible. As regards the refund of ₹ 87331, we find that the invoices have been raised by Mumbai Port trust which clearly show the amount of service tax therein and the name of the respondent is also duly mentioned therein. Port services are specifically covered under Notification No.41/2007-ST, dated 06.10.2007. The judgement of CESTAT in the case of Velji P & Sons (2007 (8) TMI 35 - CESTAT, AHMEDABAD) is of no help to Revenue when the invoices themselves have been issued by Mumbai Port Trust and show the amount of service tax therein because the said judgement nowhere states that the refund of service tax paid under Port Services is not admissible as per Notification No,41/2007-ST. No infirmity in the impugned order - Decided against Revenue.

Summary

Issues: Appeal against refund order under Notification No.41/2007-ST for technical testing services and wharfage charges.

Analysis:
1. The appellant filed a refund claim which was partially sanctioned by the adjudicating authority. The respondent appealed against the rejection of the remaining amount, focusing on the refund of Rs. 99,341 under Notification No.41/2007-ST for technical testing services and wharfage charges.

2. The Commissioner (Appeals) accepted the respondent's arguments, allowing the refund based on the contention that technical testing services and port services were covered under the said notification. The Revenue, in its appeal, challenged this decision, arguing that the technical testing charges were incurred during procurement, and the issue was about the eligibility of services for refund, not their classification. Additionally, the Revenue contended that the wharfage charges did not qualify under the notification, citing a relevant CESTAT judgment.

3. During the hearing, the respondent reiterated that the technical testing services were necessary for export goods as per the agreement with buyers, making them eligible for refund under the notification. Regarding the wharfage charges, the respondent presented invoices from Mumbai Port Trust, asserting that the services were covered under Notification No.41/2007-ST.

4. The Tribunal analyzed both sides' contentions. It found the technical testing services to be admissible for refund under the notification as they were required for exported goods as per the agreement with buyers. Similarly, the Tribunal concluded that the wharfage charges were covered under the notification based on the invoices from Mumbai Port Trust, dismissing the Revenue's arguments and citing that the CESTAT judgment referenced by Revenue did not support their position.

5. Consequently, the Tribunal upheld the Commissioner (Appeals) order, dismissing the Revenue's appeal as it found no fault in the decision to allow the refund of Rs. 99,341 under Notification No.41/2007-ST for technical testing services and wharfage charges.