Refund Admissible on Service tax Paid on Transportation of Empty Container From Port to Factory: CESTAT [Read Order]

In a recent case, the Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) refunded admissible service tax paid on the transportation of empty containers from port to factory.

M/s Vinayak Textiles Mills, the appellant challenged the impugned order passed by the Commissioner (Appeals) of Central Excise, Chandigarh-II wherein the Commissioner (Appeals) rejected the refund claim of the appellant to the tune of Rs. 1,26,820/-.

The appellant is registered with the Central Excise Department for payment of service tax under the category of “GTA”.  During the period 1.04.2008 to 30.06.2008, the appellant exported the processed Fabric and availed various services about such exports.  As per Notification No. 41/2007 dated 06.10.2007, the exporter can claim a refund of the service tax paid on the services specified therein, availed for the export of goods. 

The appellant applied for the refund of service tax amounting to Rs. 1,77,068/- for the quarter ending June 2008.  The Revenue instead of sanctioning the refund claim, issued the show cause notice dated 27.03.2009 proposing to deny the refund.  Consequent to the order-in-original dated 22.02.2010 and order-in-appeal dated 15.03.2011, the refund amounting to Rs. 1,26,820/- out of the total claim of Rs. 1,77,068/- is in dispute.

He further submitted that there is no dispute about availing the services for export as well as payment of Service Tax thereon.  It is only that the service provider was not registered under CHA/Port Service. He also submitted that the Registration under a particular service is not necessary for exemption under Notification No. 41/2007.  For this submission, he relied upon the decision of the Hon’ble Rajasthan High Court in the case of Union of India Vs. Arihant Tiles and Marbles Pvt. Ltd. – 2019 (20) GSTL 21 (Raj.).

The appellant has produced the confirmation of the contract which clearly shows the payment of commission at a fixed rate on the FOB Value of the export and this issue has been settled by the Tribunal in the case of Mittal International cited (supra).

The second objection to denying the refund claim is concerned is in the case of CAP & SEAL (Indore) Pvt. Ltd, wherein the Tribunal has specifically held that the service tax paid on transportation of empty containers from port to factory is admissible as a refund.

The Tribunal held that in the case of Shivam Exports, SRF Ltd., and AIA Engineering it has been held that irrespective of the classification of service, if the services are provided within the port, the same should qualify as port service for the benefit of refund.

A two-member bench comprising  Mr S S Garg, Member (Judicial) and Mr P Anjani Kumar, Member (Technical) has held that “the impugned order is not sustainable in law and set aside the same by allowing the appeal filed by the appellant with consequential relief, if any, as per law.”

To Read the full text of the Order CLICK HERE

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