Refund of Service tax on Transportation charges of empty containers from Container yard to factory

PJ/Case Laws/2011-12/1521

Case: Balkrishna Industries Ltd. Vs. Commissioner of C.Ex., Aurangabad

Citation: 2011(24) S.T.R. 433 (TH.-Mumbai)

Issue:- Refund of Service Tax paid on transportation charges of empty container from container yard to the factory premises – whether allowable?

Brief Facts:- Appellant filed refund claim of Service Tax paid on GTA services on outward freight in relation to transportation of export consignment under Notification No. 41/2007, dated 6-10-2007. The Adjudicating authorities have rejected the refund claim on the ground that they have claimed the refund of Service Tax paid on transportation charges to and fro i.e. transportation of empty container from container yard to the factory premises and from the factory premises to the port of export.

Thereafter, the appellant filed an appeal against the Order of Adjudicating Authority before Commissioner (Appeals). But the Commissioner (Appeals) has upheld the lower authority's order rejecting the refund claim filed by the appellant. The appellant filed appeal before Tribunal against order in appeal.

Appellant Contention’s:- The appellant drawn Tribunal’s attention to amendment of Notification No. 41 /2007-S.T., dated 6-10-2007 vide Notification No. 3/2008-S.T., dated 19-12-2008 whereby 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 fro movement of the empty container as well as stuffed container. In support of their contention, the Appellant also placed reliance in the case of Commissioner of Central Excise, Madumi v. Tata Coffee Ltd. - 2011 (21) S.T.R. 546 (Tn. - Chennai).

Reasoning of Judgment:- The Tribunal held that undisputedly, the appellants have paid Service Tax on the transportation of to and fro 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. Order-in-original set aside.

Decision:- Appeal allowed with consequential relief.

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PJ/Case Laws/2011-12/1521

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