2016 (11) TMI 1003 - AT - Service Tax

Recovery of refund granted - N/N. 41/07-ST dated 6.10.2007 - the taxable service namely, Terminal Handling Charges is not confirming to the port service and GTA Service availed for movement of export cargo from place of removal to the port of export prior to 19.02.2008 is not available for refund in terms of the above referred Notification - Held that - the services towards terminal and other handling services were availed b the assessee within the port area, in connection with export of the goods. Thus, irrespective of classification of service, since the same are provided within the port for export of goods, the benefit of refund should be available under the head Port Service in terms of notification dated 06.10.2007. In this context, the Tribunal in the case of SRF Ltd., 2015 (9) TMI 1281 - CESTAT NEW DELHI have held that irrespective of the classification of service, if the services are provided within the port, the same should qualify as port service for the purpose of benefit of refund. Thus, I am of the view that the assessee is eligible for refund of ₹ 16,72,923/- With regard to GTA service availed for transportation of goods from the place of removal to the port of export, I find that the refund claim was filed after issuance of the Notification No. 3/2008 dated 19.02.2008. I also find that in an identical situation, this Tribunal in the case of East India Minerals Ltd. 2012 (8) TMI 22 - CESTAT, KOLKATA has allowed the refund claim to the appellant. As regards testing and analysis service, I find from the available records that the appellant had entered into the agreement with the overseas buyer for providing such service. Since, the agreement was in existence exist before exportation of goods, I am of the view that the requirement of Notification dated 06.10.2007 has been duly complied with by the assessee, for which refund claim cannot be denied There is correlation between the movement of goods from the place of removal to the port of export. However, I find that the assessee has not produced the copies of the agreements entered into between it and the overseas buyers. Since the contents of the agreements have to be verified by the Original authority, I am of the view that the matter should go back to the original authority for verification of the agreements - appeal allowed by way of remand.

Summary

Issues:
Refund application under Notification No. 41/07-ST dated 6.10.2007 - Eligibility for refund of Terminal Handling Charges and GTA Service for transportation of export cargo - Compliance with Notification conditions for testing and analysis service - Disputed refund amount recovery by Revenue - Verification of agreements with overseas buyers for export goods.

Analysis:

Issue 1: Terminal Handling Charges Eligibility
The assessee claimed a refund under Notification No. 41/07-ST for Terminal Handling Charges. The Commissioner ordered recovery of a portion of the sanctioned refund. The Ld. Advocate argued that since the services were availed within the port area, they should be considered as port services for refund purposes. Citing precedents, it was contended that services within the port qualify for refund. The Tribunal agreed, granting a refund of ?16,72,923 for Terminal Handling Charges.

Issue 2: GTA Service for Transportation
Regarding GTA service for transporting goods to the port, the refund claim was filed post-amendment. The Ld. Advocate referenced a Tribunal decision allowing a similar claim post-amendment. The Tribunal, following precedent, allowed a refund of ?1,00,742 for transportation charges to the port.

Issue 3: Compliance with Notification for Testing and Analysis Service
The Ld. Advocate presented an agreement with overseas buyers to show compliance with Notification conditions for testing and analysis service. The Tribunal found the agreement sufficient, granting the refund for this service.

Issue 4: Recovery of Disputed Refund Amount
The Revenue appealed against the dropping of ?15,46,270 demand, citing lack of proof of transportation charges for export goods. The Tribunal noted a correlation between goods movement and export but required verification of agreements with overseas buyers for refund eligibility. The matter was remanded for verification.

Conclusion
The Tribunal allowed a refund of ?17,87,445 to the assessee for Terminal Handling Charges and transportation services. The matter of ?15,46,270 refund claimed by the Revenue was remanded for verification. The decision emphasized compliance with Notification conditions and the need for proper documentation to support refund claims.

End of Analysis