2018 (10) TMI 33 - AT - Service Tax

Refund claim - GTA Services - N/N. 41/2007-ST, dated 06.10.2007 as amended and subsequent N/N. 17/2009-ST, dated 07.07.2009 - reverse charge mechanism - whether during the relevant periods i.e., 01.04.2008 to 31.12.2008, the Goods Transport Agency services availed by the appellant were covered by the aforesaid exemption notifications or not? Held that - All periods are prior to 19.02.2008 i.e., the date on which the N/N. 3/2008-ST was issued amending N/N. 41/2007. This exemption notification exempted goods transport agency services provided by the exporter in relation to transport of export goods . It does not say Goods Transport Agency services for transport of export goods. Therefore, the question is whether the word in relation to transport of export goods covers also the transport of the empty containers to the factory of manufacturer before sending the stuffed containers to the port or inland container depot. It has been uniformly held that the words in relation to transport of export goods cover even bringing the empty containers to the factory for the purpose of stuffing the export goods. There is no reason to deviate from this consistent position taken in the various decisions - the appellant is entitled to refund of the service tax paid on goods transport agency services availed for transport of empty containers from the container yard to the factory for the purpose of export of goods. Since, there is no doubt about the eligibility of the exemption notification, there is no room to give the benefit of doubt to the revenue in this case. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund of service tax paid under reverse charge mechanism for transportation of empty containers for export.

Analysis:
1. Issue of Refund Eligibility: The appellant, engaged in manufacturing and export, paid service tax under reverse charge mechanism for services from Goods Transport Agents (GTA) and claimed refund under Notification No.41/2007-ST and subsequent Notification No.17/2009-ST. The department sanctioned 50% refund, disallowing the rest, arguing exemption only for transportation from factory to port, not for empty containers to the factory.

2. Appellant's Argument: The appellant contended that bringing empty containers to the factory is essential for export, making it part of the export process. Citing various cases, they argued that empty container transport is covered under the exemption notifications, seeking full refund.

3. Department's Stand: The department, citing the Order-in-Original and Order-in-Appeal, maintained that the exemption did not explicitly cover empty container transport. Referring to a recent Supreme Court judgment, they emphasized strict interpretation of exemption notifications in favor of revenue.

4. Tribunal's Decision: The Tribunal analyzed the wordings of the exemption notifications and relevant periods. It noted that the notifications exempted services "in relation to transport of export goods." Relying on precedent cases, it concluded that bringing empty containers to the factory for stuffing export goods falls under this exemption. The Tribunal rejected the revenue's doubt-benefit principle due to clear eligibility in this case, allowing the appeals for full refund.

5. Conclusion: The Tribunal allowed the appeals, granting consequential relief for the appellant. The decision was based on the interpretation that bringing empty containers to the factory for export purposes falls under the exemption notifications, emphasizing the importance of the phrase "in relation to transport of export goods."