Refund of service tax on service used on export of goods-transportation of empty containers

PJ/Case Laws/2011-12/1283

Case: M/s Garware Polyester Ltd. Versus CCE, Aurangabad

Citation: 2011-TIOL-988-CESTAT-MUM

Issue:-Refund of service tax in relation to transportation of empty container from container yard to factory premises and from factory premises to port of export – whether covered under “in relation to transport of export goods”

Brief Facts: - Appellant-exporter filed refund claim of Service Tax paid on GTA services on outward freight in relation to transportation of export consignment under Notification no. 17/2009-ST dated 07.07.2009.

The lower authorities rejected the refund claim on the ground that they have claimed the refund of Service Tax paid on transportation charges to and from i.e. transportation of empty container from container yard at Mumbai to the factory premises at Waluj and from the factory premises to the port of export.

In appeal the Commissioner (Appeals) upheld the lower Authority's order rejecting the refund claim filed by the appellant. Hence, appellant is before the Tribunal.

Appellant’s Contention:- Appellant contended that by amendment of Notfn no. 41/2007-ST vide Notfn no. 3/2008-ST empty container was added in respect of Section 65(105)(zzp) for services provided to an exporter in relation to transport of export goods directly from the place of removal to inland container depot or port or airport, as the case may be, from where the goods are exported.

The appellant emphasized on the expression used in Notification “in relation to export” therefore, they are entitled for refund of Service Tax paid on to and from movement of the empty container as well as stuffed container. In support of their contention, they also placed reliance in the case of Commissioner of Central Excise, Madurai vs. Tata Coffee Ltd. 2011(21)STR 546(Tri-Chennai).

Reasoning of the Judgment:- The Tribunal held that undisputedly, the appellants have paid Service Tax on the transportation of to and from movement of the container. The expression used in the Notification no. 3/2008- is “in relation to transport of export goods”. This expression covers the transport of empty container from the factory to place of export of goods. The Tribunal in the case of Tata Coffee Ltd. has held that the expression “in relation to transport of export goods” is wide enough to cover even transport of empty containers from the yard to the factory for stuffing of export goods.

Accordingly, the Tribunal held that the order of the Commissioner (Appeals) is not sustainable in law, and set aside the same.

Decision:- Appeal allowed.

Comments:- This decision is another addition to the series of decisions, where by unnecessary litigation is being created by department by denying the refund of service tax used in the export of services. We have reported many such decisions in the past and also a have written series of articles titled “Johnny and service tax refund” on the same.

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PJ/Case Laws/2011-12/1283

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