2017 (6) TMI 683 - AT - Service Tax

Refund claim - N/N. 41/2007 - denial on the ground that the appellant has claimed duty drawback - Held that - The said issue came up before this Tribunal in the case of Mittal International 2017 (3) TMI 1512 - CESTAT CHANDIGARH wherein it has been held that the input service used for export of goods are not the part of the drawback claim, therefore, the appellant is entitled for claim refund of services used for export of goods - refund allowed. Refund claim - Terminal Handling Charges - Inland Haulage Service - Held that - the Terminal Handling Charges and Inland Haulage Charges are covered under port services and the appellant is entitled for refund claim of Terminal Handling Charges as the same has been received for export of goods, therefore, the appellant is entitled for refund claim. Whether the contract is required for commission paid to the commission agent and consequently, refund claim can be denied on this ground? - Held that - the appellant has paid charges of services provided by the commission agent located outside of India and charges has been shown in the said invoices, the appellant has paid service tax under the reverse charge mechanism, therefore, the appellant is entitled to claim refund of commission paid to the commissioner agent located outside India. Whether the appellant is entitled for refund claim of CHA service provided by the service provider where the CHA service is not authorised by the appellant and invoices are raised by other CHA who has provided services to the appellant? - Held that - It is not disputed that the appellant has availed the services of CHA and the same has been received in connection with the export of goods by the appellant. In that circumstances, as the invoices shows co-relation with the export of goods, the same is sufficient for entitlement of refund claim under N/N. 41/2007. The matters are remanded back to the adjudicating authority for verification - appeal allowed by way of remand.

Summary

Issues:
1. Entitlement for refund claim under Notification No. 41/2007 for services used for export of goods.
2. Entitlement for refund claim of Terminal Handling Charges and Inland Haulage Service.
3. Requirement of a contract for commission paid to a commission agent and its impact on refund claim.
4. Entitlement for refund claim of CHA service provided by a service provider not authorized by the appellant.

Analysis:

(A) Entitlement for refund claim under Notification No. 41/2007 for services used for export of goods:
The Tribunal referred to the case of Mittal International, where it was established that input services used for export of goods are not part of the duty drawback claim. Consequently, the appellant is entitled to claim a refund for services used in the export of goods.

(B) Entitlement for refund claim of Terminal Handling Charges and Inland Haulage Service:
Drawing from the precedent set in Mittal International, it was clarified that Terminal Handling Charges and Inland Haulage Charges fall under port services. As these charges were incurred for the export of goods, the appellant is deemed eligible for a refund claim related to these services.

(C) Requirement of a contract for commission paid to a commission agent and its impact on refund claim:
The Tribunal noted that the appellant had paid charges to a commission agent located outside India, with the charges clearly reflected in the invoices. Since service tax was paid under the reverse charge mechanism, the appellant is considered entitled to claim a refund for the commission paid to the commission agent.

(D) Entitlement for refund claim of CHA service provided by a service provider not authorized by the appellant:
Although the appellant did not directly authorize the CHA service provider and invoices were raised by another CHA, it was established that the services were utilized in connection with the export of goods. Citing the case of Sopariwala Exports, the Tribunal concluded that the correlation between the services and the export of goods is sufficient for the appellant to be eligible for a refund claim under Notification No. 41/2007.

The Tribunal remanded the matters back to the adjudicating authority for verification and sanctioning of the refund claim filed by the appellant, ultimately disposing of the appeals in favor of the appellant.