2017 (8) TMI 219 - AT - Service Tax

Refund claim - N/N. 41/2007-ST dated 06.10.2007 - Transportation Charges - denial on the ground that these are not used for export of goods - Held that - the goods which has been exported by the appellant are required to be stuffed in the containers only and containers are available at port, therefore, the transportation of empty containers from port to their factory is a service received by the appellant for export of goods, therefore, on the said services, the refund claim cannot be denied as the same has been used by the appellant for export of goods. Refund claim - Inland Haulage Charges - denial on the ground that the condition of Rule 4(A) of the Service Tax Rules has not been met out by the appellant - Held that - as per CBEC circular No.112/6/2009 dated 12.03.2009, it has been clarified that merely, the procedural lapse on behalf of the service provider, the refund claim cannot be denied to the exported of goods when it has been established that the service has been used by the appellant for export of goods, therefore, the refund claim on this ground cannot be denied. Refund claim - Terminal Handling Charges - storage - denial on the ground that these are not port services - Held that - services has been used by the appellant at port for export of goods, therefore, any services received at port is covered under port services, therefore, the appellant is entitled to the benefit of refund claim on the above services. Refund claim also denied on the ground that the appellant is claiming drawback on the goods exported - Held that - similar issue decided in the case of M/s Shahi Exports Pvt. Ltd. Versus CCE, Delhi-IV 2017 (3) TMI 1543 - CESTAT CHANDIGARH , where it was held that the refund claim filed by the appellant cannot be rejected on the ground that the appellant has claimed drawback on specified services - refund allowed. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Refund claim rejection under Notification No.41/2007-ST dated 06.10.2007 for services availed for export of goods.

Analysis:
1. Inland Haulage/Transportation Charges:
The appellant's refund claim was rejected on the premise that Inland Haulage Charges were not used for export of goods. However, it was established that transporting empty containers from the port to the factory was essential for stuffing goods into containers for export. The transportation service was directly linked to the export process, making the appellant eligible for a refund on these services.

2. Inland Haulage Charges:
The invoices and shipping documents clearly indicated that the Inland Haulage Charges were utilized for transporting goods for export. Despite a procedural lapse in meeting Rule 4(A) of the Service Tax Rules, a CBEC circular clarified that the refund claim cannot be denied if the service was indeed used for export. Thus, the appellant successfully proved the usage of these services for export, warranting a refund.

3. Terminal Handling Charges, storage as port service:
The services of Terminal Handling Charges and storage availed by the appellant at the port were deemed essential for the export process. Any services received at the port were considered as port services, making the appellant eligible for a refund on these specific services.

4. Claiming drawback on exported goods:
The appellant's claim was challenged due to claiming drawback on exported goods. However, referencing a previous tribunal case, it was clarified that drawback rules do not apply to input services used post-manufacturing of export goods. Since the services in question were received after manufacturing and were not included in the drawback claim calculation, the appellant's refund claim could not be rejected on these grounds.

In conclusion, the Tribunal ruled in favor of the appellant, stating that they were entitled to the refund claim. The impugned order was set aside, and the appeal was allowed based on the detailed analysis and findings presented regarding the services used for the export of goods.