Whether service tax refund in respect of THC allowable under old notification 41/2007?

PJ/Case law/2013-14/1626

Case:-ANGIPLAST PVT. LTD. Versus COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD

Citation:- 2013 (30) S.T.R. 186 (Tri. - Ahmd.)

Brief Facts:-The Appellant had applied for the refund in respect of service tax paid on Terminal Handling Charges. Later on Refund claim has been rejected on the ground that appellant's claim for refund of service tax paid on various services including Terminal Handling Charges used in respect of goods exported, is not admissible.

Appellant’s Contention:-The Appellant submits that appellant is challenging rejection of refund claim only in respect of Terminal Handling Charges amounting to Rs. 58,380/- and the balance being relating to different services involving a small amount, is not being challenged. He relies upon the decision of this Tribunal in the case of Apollo Tyres Limited v. CCE, Vadodara in appeal Nos. ST/685 to 689 of 2010 and Micro Polymers Pvt. Limited v. CCE, Ahmedabad - 2010 (19) S.T.R. 679 (Tri.-Ahmd.) to submit that refund claim in respect of Terminal Handling Charges has to be allowed. He also points out that learned Commissioner (Appeals) has taken a view that in Macro Polymerscase, the observation regarding eligibility for refund of service tax paid on Terminal Handling Charges was obiter-dictum and therefore not applicable, is not correct.

Respondent’s Contention:-The Respondent would submit that Terminal Handling Charges was specifically mentioned when Notification No. 17/2009 was issued amending the Notification No. 41/2007-S.T. and therefore, decision holding for the earlier period refund is not admissible, is legal and proper.

Reasoning of Judgment:-After considering the submissions made by both sides, Tribunal is unable to accept the view that the observations in the order of this Tribunal in the case of Macro Polymers Pvt. Limiteddid not constitute a ratio as regards eligibility for refund. In fact, it was found that this decision was followed by the Tribunal in the case of Apollo Tyres Limitedcited by the learned counsel subsequently. Moreover, Para 6 of the order reproduced below makes it quite clear that Tribunal took the view that refund is admissible since service tax on Terminal Handling Charges was paid on the Port Services and the Port Service was a notified service and matter was remanded only for the purpose of verification as to whether the service tax paid on the Port Service or not. From the certificate it is quite clear that both terminal handling charges and REPO charges were paid to JNPT/NSICT and GTIL port services. It is surprising that in respect of REPO charges, the Commissioner has accepted the stand taken by the appellants that it is covered under port service whereas for terminal handling charges he considers that the same is not relating to port service. In fact the department could have easily verified whether THC and REPO charges were actually charges paid towards service tax for port services or not since Expressing Shipping and Logistics clearly says that whatever they have collected they have paid to the port authorities. Once REPO have been allowed, Tribunal do not find any justification to deny terminal handling charges. As regards bill of lading charges, there is no certificate given by Express Shipping and Logistics and from the invoices also it cannot be found out as to under which category of services the service has been classified. Since refund of service tax is allowed based on specific category of services, it is necessary for the refund sanctioning authority to know under which head service tax has been paid. In the absence of any certificate or evidence produced by the appellants with regard to the actual heading under which this service was classified either service provider, the sanctioning authority could have required the appellants to produce evidence to show the category of service under which service tax has been paid. Neither the appellant nor the Revenue has undertaken this exercise. Therefore, as regards service tax on bill lading charges, the matter is remanded to the original adjudicating authority before whom the appellants may produce evidence to show under which category the payment of service tax has actually been made by the service provider. It is made clear that if the appellants fail to produce evidence within a reasonable time of sixty days from the date of this order, refund sanctioning authority shall be free to take a decision on this issue. In the result, it is held that appellant is eligible for the benefit of refund of service tax with regard to terminal handling charges and as regards bill of lading charges the matter shall be decided by the original adjudicating authority on the basis of documentary evidence that will be produced by the appellant. Appeals are decided by setting aside the impugned order and by way of remand to Original Adjudicating Authority to decide the terms of above observation. In this case, the rejection has not been made on the ground that it is not Port Service but only on the ground that the Terminal Handling Charge was not specifically mentioned earlier. Since, there is no dispute nor there is any record or observation to show that service tax was not paid under the category of Port Service for Terminal Handling Charges and Port Services, admittedly are notified in the Notification No. 41/2007-S.T., refund is admissible. Accordingly, the appeal is allowed with consequential relief to the appellant.

Decision:-Appeal Allowed.

Comment:-The essence of this case is that refund of service tax paid for THC is admissible even under the old notification no. 41/2007, though the refund with respect to this service was specifically included vide notification no. 17/2009 as these charges are related to port and export of goods for which the benefit is admissible.

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PJ/Case law/2013-14/1626

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