2017 (3) TMI 1512 - AT - Service Tax

Refund claim - rejection on the ground that the goods have been exported and drawback is allowed on the export of goods - Held that - the services which were used by the appellants for export of the goods does not form part of the drawback claim therefore the appellants are entitled for refund of the service tax paid on the said specified services. The refund claims cannot be denied on this account - refund allowed. Refund claim rejected on fumigation service as the appellants have not arranged the copy of the written agreement for availing those services - Held that - in some of the cases the refund claims were filed on account of fumigation services availed by the appellants and the copy of the written agreement have not been provided to the adjudicating authority. Therefore the appellants are required to provide a copy of the agreement for such specified services. To examine the issue the matter is remanded back to the adjudicating authority to consider written agreement availed by the appellants - matter on remand. With regard to the business auxiliary services the refund claim was rejected on the ground that the exporter has not provided agreement or contract or any other documents requiring the commission agent located outside India has provided the service to the exporter in relation to the sale of goods - Held that - the authorities below have not understood the true spirit of the notification. In fact the notification specifies that any other documents which means if the appellant provides the copy of the invoice for the commission paid the same will serve the condition of the notification. Therefore if the invoice of the commission agent is on record in that circumstance the appellants have complied with condition of the notification and the appellant is entitled for availing the refund - refund allowed. With regard to the services of CHA the refund has been denied on the ground that the same appears to have been outsourced by the service provider as person who has issued the invoice is not the one who has provided the service - Held that - the service provider has mentioned the shipping bill number in the invoice as the service provider has been recognized as service provider and has paid service tax on the service in that circumstance the appellants are entitled for refund of services tax paid on CHA service - refund allowed. Denial of Refund claims on GTA service - denial on the ground that the appellants were required to discharge service tax liability and to produce the copy of the GR challan - Held that - the appellants have produced the copy of the invoices of the transporter who has transported the goods and paid service tax thereon. The proof of payment of service tax by the appellant does not arise as invoices have been issued by the transporter which indicate the payment of service tax therefore the invoice and lorry receipt is sufficient for claim of refund - refund allowed. Denial of Refund for the services namely terminal handling charges documentation charges bill of lading charges - denial on the ground that the services received by the appellant namely terminal handling charges documentation charges bill of lading charges are the services in the nature of logistics services therefore they are covered under the business support service and are not entitled for availment of the benefit of N/N. 41/2007-ST as business support services are not eligible for refund claim - Held that - the service tax paid by the service provider on the services availed by the appellants are at port therefore all the services are covered under port services. Therefore the appellants are entitled for refund claim - refund allowed. Appeal allowed in part and part matter on remand.

Summary

Issues:
Refund claims denied on various grounds under Notification No.41/07-ST.

Analysis:
The judgment addresses multiple issues related to the denial of refund claims under Notification No.41/07-ST. The first issue discussed is the denial of refund claims based on claiming drawback on exported goods. The Revenue argued that claiming drawback disqualifies the appellants from refund claims on services used for exports. However, the Tribunal noted that services used for exporting goods are separate from drawback claims, entitling the appellants to a refund of service tax paid on specified services.

Another issue pertains to refund claims rejected due to lack of a written agreement for fumigation services. The Tribunal remanded the matter to allow the appellants to provide the necessary agreement for consideration of refund claims related to fumigation services.

The judgment also addresses the rejection of refund claims for business auxiliary services due to the absence of a contract or agreement with a commission agent located outside India. The Tribunal clarified that providing an invoice for commission paid satisfies the conditions of the notification, entitling the appellants to a refund.

Refund denial on Customs House Agent (CHA) services was also discussed. Citing a previous case, the Tribunal emphasized that if the service provider is recognized and has paid service tax, the appellants are eligible for a refund on CHA services.

The denial of refund claims on Goods Transport Agency (GTA) services was another issue. The Tribunal ruled that producing invoices from the transporter, indicating payment of service tax, is sufficient for refund claims, eliminating the need for a GR challan.

Lastly, the judgment addressed the denial of refund for terminal handling charges, documentation charges, and bill of lading charges, categorizing them as logistics services. However, citing precedent, the Tribunal held that services availed at the port qualify for a refund, directing the adjudicating authority to consider the refund claims in light of the observations made.

In conclusion, the Tribunal disposed of the appeals by remanding the matters back to the adjudicating authority for further consideration based on the clarifications provided in the judgment.