2012 (7) TMI 165 - AT - Service Tax

Export of goods - denial of refund of cenvat credit on the ground that the appellant is not eligible for the refund of service tax paid on input services i.e. on Terminal Handling Charges - terminal handling charges and REPO charges were paid to JNPT/NSICT and GTIL port services Held that - Department could have easily verified whether THC and REPO charges were actually charges paid towards service tax for port services or not since Expressing Shipping and Logistics clearly says that whatever they have collected they have paid to the port authorities. Once REPO have been allowed, no justification to deny terminal handling charges in favor of assessee Regarding bill of lading charges - no certificate given by Express Shipping and Logistics and from the invoices also it cannot be found out as to under which category of services the service has been classified - Since refund of service tax is allowed based on specific category of services, it is necessary for the refund sanctioning authority to know under which head service tax has been paid - as regards service tax on bill lading charges, the matter is remanded to the original adjudicating authority - in favour of the assessee

Summary

Issues:
- Eligibility for refund of service tax paid on input services i.e. Terminal Handling Charges.
- Interpretation of Notification No. 17/2009-ST dated 07.7.2009 regarding refund applicability.
- Categorization of services under Port Services for refund eligibility.

Analysis:
1. The appeals were filed against the denial of refund of cenvat credit for export of goods due to service tax paid on Terminal Handling Charges. Both lower authorities rejected the refund claim stating the appellant was not eligible for service tax refund on input services.

2. The appellant contended that the service charges paid to the CHA for export consignment clearances included Terminal Handling Charges. The absence of a specific category for Terminal Handling Services under service tax was highlighted, arguing that such services were part of Port Services. Reference was made to a previous decision supporting this argument.

3. The Department cited Notification No. 17/2009-ST dated 07.7.2009, claiming that only services known as Terminal Handling Services became eligible for refund from that date onwards.

4. The main issue was whether the appellant could claim a refund for service tax paid on services categorized as Terminal Handling Services. The absence of a distinct category for such services under service tax was noted. It was established that services like Terminal Handling were generally considered part of Port Services. The period in question was before the notification relied upon by the Department.

5. Referring to a previous case, the judgment favored the appellant, emphasizing the need for evidence to determine the category under which service tax was paid. The decision supported the refund eligibility for Terminal Handling Charges and remanded the issue of bill of lading charges for further evidence production.

6. The judgment concluded by setting aside the impugned orders and allowing the appeals in favor of the appellant based on the established principles and previous case law.

This detailed analysis covers the issues of eligibility for refund of service tax on Terminal Handling Charges, the interpretation of relevant notifications, and the categorization of services under Port Services for refund purposes, as addressed in the judgment by Appellate Tribunal CESTAT, AHMEDABAD.