2016 (10) TMI 765 - AT - Service Tax

Rejection of refund claim - terminal handling charges - Bill of lading charges - origin haulage charges - repo charges - CHA services - N/N. 41/07-ST dated 6.10.07 - whether the rejection justified on the ground that the services cannot be considered as port services? - Held that - the issue stand decided in the case SRF Ltd. vs. CCE Jaipur I 2015 (9) TMI 1281 - CESTAT NEW DELHI and the decision relied upon where it was held that exporter should not be unduly burdened with a condition to establish that the service provider was registered under port services and the disputed issue is settled in favour of the assessee. Proper invoices not submitted and it is only the debit notes on the basis of which the refund of Service Tax claimed - Held that - the Revenue s allegation that nothing was produced on record to show the proof of payment of service tax by the service provider cannot be appreciated inasmuch as it is not the obligation of the service recipient to deposit the service tax and having paid to the service provider and it is for the service provider to show the proof of payment of service tax. No such requirement stands specified in the notification in question and Board has also clarified that it is sufficient to show that the amount of service tax stand paid to the service provider. Air services - not covered in the notification - Held that - the same were actually not air services but courier services. The said services obtained by them were courier services which at further intimation transported through air. Courier services being specified as one of the service inputs is admissible to the assessee. The fact whether the service tax was relatable to courier service or not is required to be examined and for the purpose I remand the matter in respect of M/s. Johari Digital Health Care Ltd. on the said issue only for examining the aspect. Appeal dismissed - decided in favor of appellant - matter remanded for M/s. Johari Digital Health Care Ltd.

Summary

Issues:
Refund of service tax paid on various services used for export of goods; Rejection of refund claims by lower authorities; Disputed issue settled in favor of assessee based on previous decisions; Denial of refund on the basis of improper invoices; Obligation of service provider to show proof of payment of service tax; Denial of refund on air services claimed as not covered under notification; Differentiation between air services and courier services; Remanding the matter for examination; Denial of refund on cleaning activities not pressed by the appellant.

Analysis:
The judgment by the Appellate Tribunal CESTAT NEW DELHI addresses multiple issues concerning the refund of service tax paid on various services utilized for the export of goods. The Tribunal found that the appellants, being exporters, were entitled to the refund of service tax under notification No. 41/07-ST dated 6.10.07. However, the lower authorities had rejected refund claims related to terminal handling charges, Bill of lading charges, origin haulage charges, repo charges, and CHA services, citing that these services did not fall under the category of port services.

The Tribunal noted that the issue had been previously decided in favor of the assessee in various cases, as referenced in the judgment. Additionally, the Tribunal addressed the concern raised by the lower authorities regarding the submission of proper invoices for claiming the refund. It was clarified that the obligation to prove payment of service tax rested with the service provider, not the recipient, and the notification did not specify such a requirement. The Tribunal dismissed the Revenue's objection on this ground.

In a specific case, the Tribunal discussed the denial of refund on air services claimed by the assessee, which were later clarified to be courier services transported through air. The Tribunal remanded the matter for further examination to determine if the service tax was related to courier services. Additionally, a part of the refund related to cleaning activities was denied but not pressed by the appellant, leading to confirmation of the denial.

Conclusively, the Tribunal allowed all appeals with consequential relief, except for the case of M/s. Johari Digital Health Care Ltd., which was remanded back for examination on the specific issue regarding the differentiation between air services and courier services.