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2022 (9) TMI 1340 - AT - Service TaxDisallowance of refund claim - amount in respect of invoices issued by AB Commercial for transportation of iron ore fines - to be qualified under GTA services or Cargo Handling Services ? - HELD THAT - The Adjudicating authority vide Order-in-Original dated 23.09.2010 had allowed the refund claim of the Appellant in respect of the transportation Bills issued by AB Commercial totaling to Rs.2,22,119/- observing that the goods were carried upto the point of port of export from origin and that this is sufficient to have a nexus with the exportation of the goods. Thus, the amount of Rs.2,22,119/- is liable to be considered for sanction. Subsequent to the above order of the Adjudicating authority sanctioning the refund, the Department had preferred an Appeal before the Commissioner of Central Excise (Appeal-I) alleging that the invoices issued by AB Commercial were related to Cargo Handling Services and not Goods Transport Agency (GTA) as claimed by the Appellant and there is no provision for exemption under Notification No.17/2009 dated 07.07.2009 for Cargo Handling Services . Hence, the amount of Rs.2,22,119/- has been erroneously refunded vide Order-in-Original. After following the due process of law, the Ld.Adjudicating authority vide de novo Order-in-Original dated 03.02.2012 disallowed the refund claim of Rs.2,22,119/-. Against the said de novo order, the Appellant filed Appeal before the Ld.Commissioner(Appeals) and the Ld.Commissioner(Appeals) vide the impugned Order-in-Appeal rejected the Appeal filed by the assessee holding that the refund sanctioned on the invoices issued by M/s. AB Commercial to the tune of Rs.2,22,119/- is not admissible. The facts of the present case are squarely covered by the decision in the case of Rungta Projects Ltd. Vs. CCE ST, Allahabad 2017 (9) TMI 791 - CESTAT ALLAHABAD where it was held that transportation of coal was the essential service provided by the assessee and the activity of loading and unloading of coal was instantly for transportation and therefore service rendered by the assessee did not fall within the definition of Cargo Handling Service . The impugned orders cannot be sustained and is accordingly set aside - appeal allowed - decided in favor of appellant.
Issues Involved:
1. Classification of services received from AB Commercial as either Goods Transport Agency (GTA) or Cargo Handling Service. 2. Eligibility of refund claim amounting to Rs.2,22,119/- under Notification No.17/2009. 3. Correlation of freight charges with export documents concerning invoices issued by Maa Transport Company. Detailed Analysis: 1. Classification of Services Received from AB Commercial: The primary issue revolves around whether the services provided by AB Commercial should be classified under Goods Transport Agency (GTA) or Cargo Handling Service. The Department contended that the invoices issued by AB Commercial pertained to Cargo Handling Service, which is not exempt under Notification No.17/2009, and thus the refund of Rs.2,22,119/- was erroneously granted. The Appellant argued that the services were for the transportation of iron ore fines, as reflected in the invoices and supported by additional documents. The Appellant emphasized that the essential character of the services was transportation, with ancillary services like loading being incidental. This argument was supported by Circular No.104/7/2008-ST, which clarifies that composite services related to transportation should be classified under GTA if the primary service is transportation. 2. Eligibility of Refund Claim: The Appellant's eligibility for a refund under Notification No.17/2009 was scrutinized. The Appellant provided documentary evidence, including service tax payment challans and returns, to substantiate that the service tax was paid under the GTA category. The Tribunal referenced multiple precedents, including Rungta Projects Ltd. Vs. CCE & ST, Allahabad, which supported the classification of similar services under GTA rather than Cargo Handling Service. The Tribunal found that the Adjudicating authority initially allowed the refund, recognizing the transportation nature of services provided by AB Commercial. However, the Department's appeal led to a remand and subsequent disallowance of the refund by the Adjudicating authority, which the Tribunal found unjustified. 3. Correlation of Freight Charges with Export Documents: Regarding the invoices from Maa Transport Company, the Department argued that the unloading dates were beyond the LEO date of the Shipping Bill, making the refund claim untenable. The Appellant countered that all transportation expenses were related to exported goods and that correlating freight charges with export documents was impractical. The Tribunal did not delve deeply into this issue, as the primary focus was on the classification of services provided by AB Commercial and the related refund claim. Conclusion: The Tribunal concluded that the services rendered by AB Commercial were indeed transportation services taxable under GTA, not Cargo Handling Service. This conclusion was supported by the essential character of the services and the relevant circulars and case law. Consequently, the Tribunal set aside the impugned orders and allowed the appeal, granting the Appellant the refund with consequential relief as per law. (Order pronounced in the open court on 27 September 2022.)
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