2015 (9) TMI 1281 - AT - Service Tax

Refund claim - input services used in export of goods - notification No. 41/2007 - Denial on the ground that the documents issued in respect of services relating to activities at the port of export have not been issued by the port or any person authorized by the port and that the documents being debit notes, refund is not admissible - Held that - The appellant is correct in submitting that there are no conditions attached to services specified in serial No. 2 of the notification No. 41/2007. However, as column (2) specifies the service as section 65 (105) (zn), only if the services fit into the classification of section 65 (105) (zn) can they be called as Port Services. If the argument of the counsel that the services need not answer the description of sub-clause (zn) of section 65(105) is to be accepted then the description of all other services given in column (2) would be redundant. Such an interpretation is not permissible - exporter should not be unduly burdened with a condition to establish that the service provider was registered under port services. - Decided in favor of assessee. Refund on the basis of debit notes - Held that - The documents reveal that they contain all the details as required under Rule 4A of the Service Tax Rules, 1994. The purpose sought to be served by specifying the details that are to be contained in the document issued while rendering service is to provide information regarding the registration number and details of service provider details, details of service recipient, description and value of taxable service, and the service tax payable thereon. If the documents provide these necessary particulars, merely because the documents are debit notes the refund cannot be denied at the end of the service recipient. - rejection of refund is unjustified - Decided in favour of assessee.

Issues Involved:
1. Eligibility for refund under Notification No. 41/2007-ST.
2. Validity of documents issued by service providers for claiming refund.
3. Classification of services under Section 65(105) of the Finance Act, 1994.
4. Requirement of documentary evidence from port or authorized persons.
5. Acceptance of debit notes as valid documents for refund claims.

Detailed Analysis:

1. Eligibility for Refund under Notification No. 41/2007-ST:
The appellants filed refund claims for service tax paid on services like Terminal Handling Charges and Bill of Lading charges under Notification No. 41/2007-ST. The core issue was whether these services fell under the scope of the notification, which exempts certain taxable services used for export of goods. The tribunal noted that the services in question were indeed connected with the export of goods and that the appellant had paid the service tax. The tribunal observed that the description of services in the notification differed from the statutory definition in Section 65(105)(zn), leading to confusion. However, the tribunal concluded that the services must fit into the classification of Section 65(105)(zn) to be eligible for refund under the notification.

2. Validity of Documents Issued by Service Providers for Claiming Refund:
The tribunal examined whether the debit notes issued by service providers were valid documents for claiming refunds. The Revenue argued that these were not proper documents as per Rule 4A of the Service Tax Rules, 1994. The tribunal, however, found that the debit notes contained all necessary details, such as registration number, service provider details, service recipient details, description and value of taxable service, and service tax payable. Therefore, the tribunal held that merely because the documents were debit notes, the refund could not be denied if they contained all required particulars.

3. Classification of Services under Section 65(105) of the Finance Act, 1994:
The tribunal discussed the classification of services under Section 65(105)(zn), which pertains to port services. The appellant argued that the services need not strictly answer the description of sub-clause (zn) of Section 65(105). The tribunal disagreed, stating that if the services did not fit into this classification, they could not be considered port services under Notification No. 41/2007-ST. This interpretation was necessary to avoid rendering the descriptions of other services in the notification redundant.

4. Requirement of Documentary Evidence from Port or Authorized Persons:
The Revenue contended that the appellant needed to produce evidence showing that the services were provided by a port or a person authorized by the port. The tribunal noted that the appellant had paid service tax to the service provider, but the provider had classified the services under Business Auxiliary Services (BAS). The tribunal referred to a CBEC circular clarifying that refund should be granted if the service tax was paid, regardless of the service provider's classification. The tribunal also noted that the amendment to Section 65(105)(zn) and subsequent clarifications indicated that exporters should not be unduly burdened with proving that the service provider was registered under port services.

5. Acceptance of Debit Notes as Valid Documents for Refund Claims:
The tribunal addressed the issue of whether debit notes could be considered valid documents for refund claims. It found that the debit notes issued contained all the necessary details required under Rule 4A of the Service Tax Rules, 1994. The tribunal concluded that the purpose of specifying details in documents was to provide necessary information, and if debit notes served this purpose, they should be accepted for refund claims.

Conclusion:
The tribunal concluded that the rejection of the refund claims was unjustified. It held that the services in question were eligible for refund under Notification No. 41/2007-ST, the debit notes were valid documents for claiming refunds, and the appellant should not be unduly burdened with proving the service provider's registration under port services. The appeals were allowed with consequential reliefs.

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