Port service refund and reverse charge payment through cenvat credit were upheld, with bank charges sent back for verification.

Services actually used at the port for export of goods were treated as port services for refund purposes under Notification No. 41/2007-ST, so refund on Terminal Handling Charges and Custom House Agent services was admissible. Refund on bank charges was not finally denied on the present record because proof of service tax payment required factual verification, and the matter was remanded for that limited purpose. Service tax payable under reverse charge on foreign commission agent services could be discharged by utilisation of cenvat credit, as no prohibition barred that mode of payment, so the liability was held capable of being settled through credit.

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Issues: (i) whether service tax refund was admissible on Terminal Handling Charges and Custom House Agent services treated as port services for export of goods under Notification No. 41/2007-ST dated 06.10.2007; (ii) whether refund on bank charges could be denied for want of proof of service tax payment or required verification; and (iii) whether service tax payable under reverse charge on foreign commission agent services could be discharged by utilisation of cenvat credit.

Issue (i): whether service tax refund was admissible on Terminal Handling Charges and Custom House Agent services treated as port services for export of goods under Notification No. 41/2007-ST dated 06.10.2007.

Analysis: The services were received and utilised at the port of export for export of goods, and service tax had been paid on those services. The classification adopted by the service provider was held not to be decisive where the services were actually used within the port for export. Following the coordinate bench view that such services answer the description of port service for refund purposes, the refund condition under the notification stood satisfied.

Conclusion: The refund claim on Terminal Handling Charges and Custom House Agent services was held admissible in favour of the assessee.

Issue (ii): whether refund on bank charges could be denied for want of proof of service tax payment or required verification.

Analysis: The rejection rested on absence of documentary proof before the lower authority. As the assessee asserted availability of records to show that service tax had been paid on bank charges, the matter required factual verification by the original authority rather than outright denial. The impugned order was therefore set aside to that extent and the claim was made subject to verification of documents showing deposit of service tax into the Government account.

Conclusion: The issue was remanded for verification and, upon proof of payment, refund was to be extended in favour of the assessee.

Issue (iii): whether service tax payable under reverse charge on foreign commission agent services could be discharged by utilisation of cenvat credit.

Analysis: Relying on the view that a recipient liable to pay service tax under reverse charge is not barred from utilising cenvat credit for that liability, the Tribunal held that payment from the cenvat account was permissible. The reasoning applied the principle that the mode of payment through credit is not prohibited where the recipient is the person liable to pay service tax under the reverse charge framework.

Conclusion: Discharge of service tax liability through cenvat credit under reverse charge was held permissible in favour of the assessee.

Final Conclusion: The assessee succeeded on the refund claim for port-related services and on permissibility of payment through cenvat credit, while the bank-charges claim was sent back for verification.

Ratio Decidendi: Services actually used at the port for export of goods may be treated as port services for refund purposes, and a recipient liable under reverse charge may discharge service tax by utilising cenvat credit unless specifically prohibited.

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