Port services refund for terminal handling charges allowed where export period preceded the restrictive notification.

Terminal handling charges treated as part of port services were held eligible for refund of service tax for export consignments in the period before Notification No. 17/2009-ST. The Tribunal applied its earlier ruling that such charges are not a separate taxable category when the underlying levy was paid under port services, and rejected the Revenue's attempt to deny refund on the basis of later notification-based restriction. The impugned orders denying refund were set aside, and the assessee's claim succeeded.

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Issues: Whether refund of service tax paid on terminal handling charges, treated as part of port services, was admissible to the assessee for the export period prior to Notification No. 17/2009-ST dated 07.7.2009.

Analysis: The services in question were not a separate taxable category of terminal handling services but were part of the basket of port services. The assessee sought refund of service tax paid on such services in relation to export consignments, and the relevant period was October 2008 to 30.06.2009, which was prior to the notification relied upon by the Revenue. The earlier decision of the Tribunal, holding terminal handling charges eligible for refund where the underlying service tax had been paid under port services, was applied as directly covering the issue.

Conclusion: The assessee was entitled to refund of service tax paid on terminal handling charges as port services, and the Revenue's objection based on Notification No. 17/2009-ST failed.

Final Conclusion: The impugned orders denying refund were set aside and the appeals succeeded.

Ratio Decidendi: Where terminal handling charges are in substance part of port services and the export period predates the restrictive notification, refund of the service tax paid on such charges cannot be denied on the basis of artificial bifurcation of the service description.

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