2017 (10) TMI 197 - AT - Central Excise

Refund claim - whether the assessee is entitled to refund of service tax paid on repo charges, haulage charges and terminal handling charges used for export of their goods as per the N/N. 41/2007 dated 06.10.2007 as amended? - Held that - the Hon ble Gujrat High Court in the appellants own case COMMISSIONER OF CENTRAL EXCISE Versus AIA ENGINEERING PVT. LTD. 2015 (1) TMI 1044 - GUJARAT HIGH COURT , for earlier period, considered the eligibility of benefit of N/N. 41/2007 dated 06.10.2007 as amended, in relation to very same services and held that these services fall under the scope of the said Notification - refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Whether the assessee is entitled to a refund of service tax paid on repo charges, haulage charges, and terminal handling charges used for the export of goods as per Notification No.41/2007 dated 06.10.2007 as amended.

Analysis:

Issue 1: Eligibility of refund under Notification No.41/2007
The central issue in the appeals was whether the assessee is entitled to a refund of service tax paid on specific charges used for exporting goods under Notification No.41/2007. The appellant argued that the services on which service tax was paid were used for exporting goods and fell under the scope of the said Notification. The appellant relied on a judgment of the Hon'ble Gujarat High Court in a similar case to support their claim. The Revenue contended that the service providers had paid service tax under the category of Business Auxiliary Service, and therefore, the classification could not be altered for the receiver of the service. The Revenue referred to a judgment of the Hon'ble Supreme Court to support their argument. The Tribunal found that the services in question, such as repo charges and terminal handling charges, were covered by the judgment of the Hon'ble Gujarat High Court in the appellant's own case. Consequently, the service tax paid on these services, which were used for exporting goods, was held eligible for a refund under Notification 41/2007.

Issue 2: Interpretation of service classification
The dispute also revolved around the classification of services for which service tax was paid. The appellant argued that the services in question were covered under the Notification, while the Revenue contended that the services fell under Business Auxiliary Service and were not prescribed under the relevant Notification. The Tribunal examined sample invoices provided by the appellant, which described the services as terminal handling charges and repo charges. The Tribunal noted that despite the service provider paying service tax under Business Auxiliary Service, the details of services rendered indicated that they fell under the scope of the Notification. This discrepancy in classification was crucial in determining the eligibility for a refund.

Outcome:
Based on the arguments presented and the examination of relevant judgments, the Tribunal dismissed the Revenue's appeals and allowed the appeals filed by the assessee. The Tribunal held that the service tax paid on the specified services, which were used for exporting goods, was eligible for a refund under Notification 41/2007. The decision was in line with the interpretation of service classification and the precedent set by the Hon'ble Gujarat High Court in a similar case involving the appellant.