The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has recently allowed a refund claim by Hyundai Motor India where the Tribunal quashed an order of the service tax department rejecting the refund claim on port services.
The Company argued before the Tribunal that the only ground alleged in the Show Cause Notice for rejecting the claim for refund in regard to Port Services is that the invoices for payment of Service Tax have been issued by the CHA and that the CHA is not registered for providing Port Services. They further argued that as per the relevant Notification, there is no requirement that the services are to be provided by the port or any person authorized by the port in respect of the export of goods.
Tribunal bench comprising Judicial Member Sulekha Beevi C S and Technical Member P Anjani Kumar observed that prior to 30.06.2010, the definition of “Port Services” was such that only services rendered by a port or any person authorized by such port would come within the purview of taxable service.
“However, while giving the description of port services in Notification No. 41/2007-S.T. (supra), this description has not been adopted. The description of taxable services given in the Notification in regard to Port Services is “services provided for export of said goods”. The requirement that the services have to be provided by a port or any person authorized by the port has been included in the description of port service in the subsequent Notification No. 17/2009-S.T,” the bench said.
Holding that the rejection of refund on Port services cannot sustain, the bench relied on a catena of decisions and said, “From the judgment of the Hon’ble High Court it is seen that instead of adverting to Sl. No. 2 of the Notification, the Revenue has wrongly drawn the attention of the Hon’ble High Court to Sl. No. 13 of Notification No. 41/2007-S.T. Sl. No. 13 of Notification No. 41/2007-S.T. relates to Customs House Agent services under Section 65(105)(h) of the Finance Act, 1994 and not Port Services. The rejection of the refund claim is with respect to Service Tax paid on Port Services and not Customs House Agent services. Though the invoice is not issued by the port, as already discussed, as per Sl. No. 2 of the Notification No. 41/2007-S.T., it is not required to establish that the services were rendered by the port or any person authorized by the port during the relevant period and this condition was included only in the subsequent Notification i.e., Notification No. 17/2009-S.T. The issue on merits is held in favor of the assessee.”
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