2017 (9) TMI 1436 - AT - Service Tax

Refund claim - GTA service - denial on the ground that there is no linkage like shipping bill No., bill of lading No., export invoice No., etc. to show that the services are actually used for the goods claimed to have been exported under the specific shipping Bill - The Department s contention is that, the charges have not been incurred close to the date of shipment, and that there is no one to one co-relation with the goods exported - Held that - It is well-settled that in the Cenvat Scheme there is no requirement to establish a one to one relation between the goods/service and goods exported from amongst the mass of goods. It is noted that the definition of port service is very wide - CBEC Circular DOF No.334/1/2010-TRU dated 26.02.2010, gave clarity in respect of alteration and expansion in the scope of existing services and other significant changes in the Finance Act, 1994 in respect of services provided at the port. In order to remove difficulties, it is clarified that the definition of port service as amended, that all services provided entirely within the port premises would fall under these services . Thus, any service rendered within the port premises could be treated as port service - Further CBEC Circular No.120/01/2010-ST dated 19.01.2010, in respect of refund of Cenvat Credit of Service Tax to exporter, it is clarified that for the eligibility of refund, the nexus between inputs or input service and the final goods/services has to be loser. There is no requirement of one to one co-relation between inputs and outputs. As the benefit of C.B.E. & C. Circular dated 19-10-2010 and relied upon case laws were not available before the adjudicating authority, the matter is remanded back to the Adjudicating authority to decide the matter on the basis of chartered Accountant s certificate to establish the co-relation required under N/N. 41/2007-S.T. - appeal allowed by way of remand.

Summary

Issues Involved:
1. Rejection of refund claims on port services.
2. Rejection of refund claims on technical testing and analysis services.
3. Rejection of refund claims on Goods Transport Agency (GTA) services.

Issue-wise Detailed Analysis:

1. Rejection of Refund Claims on Port Services:

The respondents, registered with the Service Tax authorities, filed refund claims under Notification No.41/2007-ST dated 16.10.2007 for services used in the export of iron ore fines. The Adjudicating authority partly allowed the refund claims, but the Commissioner(Appeals) set aside this order, granting relief for port services. The Revenue contended that there was no linkage between the services and the exported goods. However, the Commissioner(Appeals) observed that charges like terminal and haulage charges, even if incurred before the export date, were necessary for the accumulation of iron ore fines at the port. It was concluded that the charges were indeed incurred for export purposes, and thus, the refund of Service Tax on port charges was admissible.

2. Rejection of Refund Claims on Technical Testing and Analysis Services:

The Commissioner(Appeals) also addressed the rejection of refund claims on technical testing and analysis services. The lower authority had rejected these claims on the grounds that the services were general and not specific to any export. However, the Commissioner(Appeals) noted that these services were rendered per agreements between the exporter and the buyer to determine the quality of goods at the port of loading. It was established that these services were specific to the goods meant for export, and therefore, the refund claims were justified.

3. Rejection of Refund Claims on Goods Transport Agency (GTA) Services:

The Adjudicating authority and the Commissioner(Appeals) both rejected refund claims on GTA services. The rejection was based on the failure to establish a direct correlation between the service tax paid and the exported goods, as required under Notification No.41/2007-ST. The Commissioner(Appeals) emphasized that the invoices did not mention the necessary details such as the exporter’s invoice number and shipping bill details. Despite the appellant's argument that the transportation of goods to the port was in anticipation of export, the lack of specific details in the documentation led to the rejection of the refund claims.

Separate Judgments Delivered:

The Tribunal rejected the appeals filed by the Revenue, supporting the Commissioner(Appeals)'s decision to allow refunds for port services and technical testing and analysis services. However, the Tribunal remanded the appeals filed by the assessee concerning GTA services back to the Adjudicating authority. The Tribunal directed the Adjudicating authority to reconsider the claims based on a Chartered Accountant’s certification, as per the C.B.E. & C. Circular dated 19-10-2010, which allows for self-certification or Chartered Accountant’s certification to establish the necessary correlation for refund claims.

Conclusion:

The Tribunal upheld the Commissioner(Appeals)'s decision to allow refunds for port services and technical testing and analysis services, rejecting the Revenue's appeals. For GTA services, the Tribunal remanded the matter to the Adjudicating authority for reconsideration based on certified documentation, thereby allowing the assessee's appeals by way of remand.