2013 (3) TMI 399 - AT - Service Tax

Appeal was made before tribunal challenging that terminal handling charges, port service and CHA services although admissible to grant Cenvat credit to the appellant, that was denied. - Submission of the appellant is that port services and terminal handling charges being inter connected with each other for the purpose of export, the service tax paid thereon shall be admissible to be set-off against duty/tax liability. - On the other hand ld. DR says that when there is no proper evidence, the appellant shall not get the benefit of cenvat credit. Held that - Tribunal has taken a view that port services and handling service charges are incurred in the course of export and shall be eligible for cenvat credit benefit under law. Therefore, the appellant shall get relief in respect of these 2 services availed and refund shall be admissible. So far as CHA service is concerned, once the appellant has not come out with clean hands evidencing the relation of service provider and service recipient, Revenue is correct to deny refund on this count. Therefore, appeal on this ground is dismissed and accordingly appeal is partly allowed.

Summary

Issues:
1. Denial of cenvat credit on terminal handling charges, port services, and CHA services.
2. Admissibility of cenvat credit on port services and handling service charges for export.
3. Discrepancy in CHA service bills leading to denial of cenvat credit.

Analysis:

1. The appellant appealed to the Tribunal after being unsuccessful before the first appellate authority, challenging the denial of cenvat credit on terminal handling charges, port services, and CHA services. The appellant argued that port services and terminal handling charges, being interconnected for export purposes, should be eligible for cenvat credit to offset duty/tax liability. However, the Revenue contended that without proper evidence, the appellant should not receive the cenvat credit, which would not result in a refund to the appellant.

2. After hearing both sides and examining the records, the Tribunal determined that port services and handling service charges, being incurred in the course of export, are indeed eligible for cenvat credit benefits under the law. This decision was based on a previous Larger Bench decision in the case of Western Agencies. Consequently, the Tribunal ruled in favor of the appellant regarding these two services, allowing for the admissibility of a refund. However, concerning the CHA service, the Tribunal noted that due to a lack of clear evidence establishing the relationship between the service provider and recipient, the Revenue was justified in denying the refund. As a result, the appeal on this ground was dismissed, and the overall appeal was partly allowed.

3. In conclusion, the Tribunal upheld the eligibility of cenvat credit on port services and handling service charges for export-related activities, leading to the admissibility of a refund for the appellant in this regard. However, the denial of cenvat credit on CHA services due to insufficient evidence supporting the service provider-recipient relationship was upheld, resulting in the dismissal of that aspect of the appeal.