2017 (6) TMI 472 - AT - Service Tax

Refund claim - Terminal Handling Charges - denial on the ground that Terminal Handling Charges are not port service and not covered under the said notification as specified services - Held that - the Terminal Handling Charges falls under the category of port services and on port services the appellant is entitled for refund claim under N/N. 41/2007 - refund allowed. Custom House Agent Service - Goods Transport Agency Service - denial on the ground that the appellant is claiming drawback against the exported goods - Held that - the said refund claim cannot be rejected on the ground that as the services used in export of goods have not been taken care to calculate the amount of drawback, the amount of service availed by the exporter is not included in drawback, the same has been clarified by the Director of Drawback, Ministry of Finance, Department of Revenue - refund allowed. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of refund claim under Notification No. 41/2007-ST for Terminal Handling Charges.
2. Denial of refund claim for Custom House Agent Service and Goods Transport Agency Service due to claiming drawback against exported goods.

Analysis:
1. Terminal Handling Charges Refund Claim:
The appellant, an exporter, filed refund claims under Notification No. 41/2007-ST for services including Terminal Handling Charges. The lower authority denied the refund, stating that Terminal Handling Charges did not fall under specified services. However, the Tribunal, in a previous order, held that Terminal Handling Charges are classified as port services, making the appellant eligible for a refund under the said notification. Therefore, the Tribunal ruled in favor of the appellant, allowing the refund claim for Terminal Handling Charges.

2. Custom House Agent Service and Goods Transport Agency Service Refund Claim:
The appellant's refund claims for Custom House Agent Service and Goods Transport Agency Service were rejected on the basis that claiming drawback against exported goods rendered them ineligible for a refund. However, the Tribunal disagreed with this reasoning. It noted that the denial of refund based on claiming drawback was unfounded. The Director of Drawback, Ministry of Finance, Department of Revenue clarified that the services used in export should not be excluded from the refund claim calculation. Consequently, the Tribunal held that the appellant was entitled to a refund for Custom House Agent Service and Goods Transport Agency Service as well.

In conclusion, the Tribunal found no merit in the impugned orders and set them aside, allowing the appeals with any consequential relief. The judgment highlights the importance of correctly interpreting the eligibility criteria for refund claims under specific notifications and ensuring that services utilized in export activities are not unjustly excluded from refund calculations.