2012 (6) TMI 392 - AT - Service Tax

Appellate court overturns refund claim rejections for GTA services, documentation charges under Notification No. 41/2007-ST.

M/s. Devarsons Industries Pvt. Limited Versus Commissioner of Central Excise Ahmedabad

The appellate court set aside the rejection of refund claims for Goods Transport Agency services, documentation charges, and Terminal Handling Charges ... Refund claim filed under Notification No. 41/2007-ST rejected - THC refund claim rejected as service provider was not authorized by the Port – Held that:- In the case of Ramdev Food Products Pvt. Limited [2011 (3) TMI 1256 (Tri)] it has been concluded that refund cannot be denied on the ground that service provider has not been authorized by Port - order rejecting the TCH and repo charges cannot be sustained. Refund claim rejected as service provider was registered under the category of BAS/ BSS – Held that: - Going through invoices it is not possible to make out which category the service provider has been registered - no evidence to show that service tax of which refund claim was made was the service tax paid on the BAS/ BSS which are not covered by the notification - in the absence of any specific clarification and merely on the basis of observations rejection of refund cannot be sustained. Refund claim on documentation charges rejected as being BAS/ BSS or Port Service – Held that: - The documentation charges have been charged by the CHA of the appellant and there is no indication as to which service has been provided - in the absence of any specific detail the presumption would be that service provided is relating to CHA which is one of the services notified under Notification No. 41/2007. Refund claim on GTA service rejected - Revenue stand one of conditions of admitting details of export invoice relating to export goods specifically mentioned in the LR and corresponding shipping bill has not been fulfilled – assessee contention that while admitting that export invoice details has not been given in the LR, co-relation is possible since the factory invoice number is mentioned in the export invoice and ARE-1- Held that:- The notification requires the export invoice number to be mentioned in the LR and in the shipping bill – considering the case of Ramdev Food Products Pvt. Limited [2011 (3) TMI 1256 (Tri)] that this is a rectifiable defect and the appellant has to file a reconciliation statement that how export invoice can be linked with LR - matter is remanded back to original adjudicating authority for decide afresh. Issues:Refund claim rejection for Goods Transport Agency services, documentation charges, and Terminal Handling Charges (THC) under Notification No. 41/2007-ST; rejection based on service provider authorization by Port and registration under Business Auxiliary Services/Business Support Services.Analysis:1. Refund Claim for THC:The appellant's refund claim for THC was rejected due to the service provider not being authorized by the Port. The appellant cited a previous Tribunal case to support their claim that such authorization is not a valid ground for rejection. The Commissioner also rejected the claim based on the service provider's registration under Business Auxiliary Services/Business Support Services. However, the appellant argued that the registration category should not impact the refund claim per a CBEC Circular. The lack of evidence to show the service tax category and the absence of an explanation by the Commissioner led to the rejection being deemed unacceptable.2. Documentation Charges Rejection:The rejection of the refund claim for documentation charges was based on them being categorized as Business Auxiliary Services/Business Support Service or Port Service. The charges were levied by the CHA of the appellant without specifying the service provided. The absence of specific details led to the presumption that the service was related to CHA, a service covered under Notification No. 41/2007.3. THC Collection by CHA:The THC collection by the CHA was also considered, with the presumption that the amount was collected and paid by the CHA. The observations regarding authorization by the Port and service categorization were deemed applicable to THC as well in the absence of contrary evidence.4. GTA Service Refund Claim:The refund claim for GTA service received by the appellant for transporting goods was rejected due to non-fulfillment of conditions, including the absence of export invoice details in the LR. The appellant argued that correlation was possible through export invoice, factory invoice, and ARE-1. While the original authority allowed the claim, the Commissioner (Appeals) disallowed it, emphasizing the need for export invoice details in LR and shipping bill. The judgment suggested that the deficiency was rectifiable, requiring a reconciliation statement from the transporter to link export invoice with LR.5. Remand for Fresh Decision:Due to the need for fresh verification and consideration of certain facts, the impugned order was set aside, and the matter remanded back to the original adjudicating authority. The appellant was to be given a reasonable opportunity to present their case for a fresh decision.This detailed analysis of the judgment addresses the issues involved in the rejection of the refund claims and the legal arguments presented by the appellant to challenge the grounds for rejection.