2017 (5) TMI 1459 - AT - Service Tax

Refund claim - Terminal Handling Charges - Custom House Agents service - denial on account that these are not port services - Held that - Since the services were availed and utilized within the port for export of goods, irrespective of the classification of the services done by the service provider, the same should merit consideration has Port Service - refund allowed. Banking charges - rejection on the ground that no documentary evidences were produced by the appellant, showing payment of service tax on the charges claimed by the banks - Held that - Since the appellant submits that it has adequate documents to demonstrate payment of service tax on the bank charges, the matter should be verified by the original authority - matter on remand. With regard to payment of service tax by utilizing the cenvat credit under reverse charge mechanism, we find that the Tribunal in the case of Kansara Modler Ltd. 2014 (1) TMI 1095 - CESTAT NEW DELHI had held that as a recipient of service, the service tax payment can be made under reverse charge mechanism by utilizing the cenvat credit - the appellant is eligible for payment of service tax from cenvat account. Appeal allowed - part matter decided in favor of appellant and part matter on remand.

Summary

Issues:
1. Refund claim of service tax paid on various input services for export of goods.
2. Consideration of Terminal Handling Charges and Custom House Agents service as port service for exemption/refund.
3. Refund claim of service tax paid on banking services.
4. Refund claim of service tax paid on services received from foreign commission agents.
5. Eligibility for payment of service tax from cenvat account under reverse charge mechanism.

Analysis:
1. The appellant, engaged in the manufacture and export of man-made yarn, filed a refund claim for service tax paid on input services used for exporting goods. The claim was denied by the authorities, leading to the appeal against the order dated 27.03.2011 passed by the Commissioner (Appeals), Customs & Central Excise, Jaipur.

2. The appellant contended that Terminal Handling Service and CHA service utilized within the port for exportation of goods should be considered as port service for exemption/refund under the relevant notification. Citing precedents, the appellant argued for the refund claim on these services, which were used within the port for export purposes. The Tribunal, following previous decisions, held that the appellant is eligible for a refund of service tax paid on Terminal Handling Charges and CHA Services utilized at the port of export.

3. Regarding the refund claim of service tax paid on banking services, the appellant provided documents to demonstrate that the services had suffered service tax. The impugned order rejected the claim due to lack of documentary evidence. The Tribunal set aside the order and remanded the matter for verification of documents showing payment of service tax on banking charges. If the documents prove the payment, the refund benefit shall be extended.

4. The appellant also sought a refund of service tax paid on services received from foreign commission agents for selling goods outside India. The appellant argued that utilizing cenvat credit for payment of service tax on such services is permissible under the reverse charge mechanism. Citing relevant precedents, the Tribunal held that the appellant is eligible for payment of service tax from the cenvat account under the reverse charge mechanism.

5. The Tribunal pronounced the decision on 05.05.2017, disposing of the appeal in favor of the appellant based on the above analysis and findings.