Whether Service Tax refund of goods transport agency service received for bringing empty containers in the factory premises admissible?

PJ/Case Laws/2012-13/1539

Case:- C.C.E. Vadodara Vs. M/s Sopariwala Exports Pvt. Ltd.

Citation:- 2013-TIOL-656-CESTAT-AHM

Brief Facts:- The issue involved in this case is regarding refund claim sanctioned by the first appellate authority to the assessee on the Service Tax paid by the transport agency for transporting empty containers from Inland Container Depot or airport to the factory of the assessee. It is undisputed that the Service Tax liability was discharged by the said transport agency. The assessee has also not taken CENVAT Credit of Service Tax paid by him and claimed the refund of the same under Notification No. 41/2007-ST, dated.6.10.2007.

Appellant’s Contention:- The Revenue submit that the services which are provided to exporter are for container transport for export goods only, and not for the direct movement of goods from place of removal to ICD or airport and the said movement of empty containers from ICD is not covered under Notification No. 41/2007. It is his submission that that the Goods Transport Agency services as indicated in the said notification is for the services received by the assessee for dispatching the final goods.

Reasoning of Judgment:- The Tribunal heard the matter and considered that the first appellate authority has recorded the following findings in this case:-

"5.2 With regard to refund claim on transportation from factory to port amounting to Rs.72,823/- rejected on the ground that the same is towards transportation of empty container from port to factory and then back to port whereas the refund is towards transportation only from factory port. In this regard, appellants have submitted the agreement dated.20.5.2008 entered into with the transporter that charges are collected for only transportation from factory to port. Whenever an exporter needs to send goods to port of port, the transporters brings containers and trucks from other places and then lifts material from factory and send to port.

With regard to the services of transportation from inland container or depot or airport to factory i.e. movement of empty container, it is observed that as per Notification No.41/2007-ST, dated. 6.10.2007, Section 65(105)(zzp) and Section 65 (105)(zzzp) of the Finance Act, 1994 which specifies the services provided to an exporter in relation to transport of goods from inland container depot to the port of export. Hence, it implies that no other services of transportation like services of transportation from inland container or depot or airport to the factory i.e. movement of empty container are not eligible for the benefit of the said notification. The appellants submitted that they had made an agreement dt.20.05.2008 with the transporter in this regard, for the charges are collected for transportation from factory to port. I have gone through the said document, it is observed that this agreement was not singed by both the parties i.e. service provider and service recipient. It has been seen signed only by the service provider namely Shree Rama Krishna Freight Carrier and not by service receiver. Hence, no relation can be placed as this a letter only. The agreement is to be taken into consideration after the signed and the parties in which they are mutually agreed. Further, it is also seen that this is nothing but the quotation made by Shree Rama Krishna Freight Carrier to the appellants. However, this issue stands settled by the decision of CESTAT Ahmedabad in the case of Choice Sanitaryware Industries Vs CCE Bhavnagar-2009 (092) RLT 0315 (CESTAT-Ahmd) = (2009-TIOL-636-CESTAT-AHM) , wherein it was held that the appellant is entitled to avail CENVAT Credit of Service Tax paid on goods transport agency service received by them for bringing the empty containers in the factory premises as also the Service Tax paid on handing/agency charges in respect of services enjoyed at the port or export. Reference was also made to its own decision in the case of CCE Rajkot Vs Rolex Rings Pvt. Ltd. - 2008 (230) ELT 0569 (Tri-Ahmd) = (2008-TIOL-383-CESTAT-AHM) and in the case of CCE Rajkot Vs Adani Pharmachem Pvt. Ltd.

I find that the above case laws are squarely applicable to the present case. I therefore, hold that the appellants are entitled for refund of the Service Tax paid on goods transport agency service received by them for bringing the empty containers in the factory premises. I also rely on the Hon'ble Supreme Court's direction delivered in the case of UOI Vs Kamlakshi Finance Corporation Ltd – 1991 (55) ELT 433 (SC) = (2002-TIOL-484-SC-CX-LB), wherein it is held that the order of the Tribunal is binding upon the Appellate Collectors who function under the jurisdiction of the Tribunal. It has also been held that principles of judicial discipline is to be followed and revenue is unreservedly follow Appellate Authority's order.

In view of the above discussion, the appellants are eligible to refund claim on transportation amounting to Rs.72,823/-. The said claim rejected by the adjudicating authority is required to be set aside."

The Tribunal find from the findings as reproduced above paragraph that of the first appellate authority had correctly followed the law which has been laid down by this Tribunal in various decisions as has been indicated by him in Order-in-Appeal. Tribunal has perused the said decisions and find that the ratio in those judgments is applicable in this case and the order of first appellate authority is correct, legal and does not suffer from any infirmity.

In view of the foregoing, Tribunal finds that the impugned order is correct and does not require any interference.

Decision:- The appeal filed by the Revenue is rejected.

Comment:- The crux of this case is that the assessee are entitled for refund of the Service Tax paid on goods transport agency service received by them for bringing the empty containers in the factory premisesas credit has been also allowed to be taken in respect of the same in view of various decisions.

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PJ/Case Laws/2012-13/1539

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