The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), allowed service tax refund and observed that terminal handling services is specified service.
The appellant, M/s Matrix Clothing Private Ltd, is exporting the readymade garments manufactured by them and are registered with the Central Excise Department. As per Notification No. 40/2007 S.T. dated 17.09.2007 and Notification No. 41/2007 dated 06.10.2007 exemption from service tax was granted in respect of certain specified services received and used by the exporters for exporting the goods manufactured by them.
Thereafter, the show cause notice was issued to the Appellant alleging that the Appellant failed to show any correlation between the input services and the export of goods, and no proper documents were produced by the Appellant to claim the refund.
The Counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without properly appreciating the facts and the binding judicial precedents on identical issues. It was further submitted that with regard to rejection of refund on Terminal Handling Services which are rendered for handling the export containers at the port of exports within the port area by authorized service providers and the same are in the nature of port services.
It was also submitted that where the appellant receives the port services, then it is insignificant as to whether the service provider is registered under the head of port services or under a different category. Thus, registration of service provider under a different category will not disentitle the Appellant from claiming the benefit of the Notification.
A Single Member Bench comprising SS Garg, Judicial Member observed that “I find that as far as the Terminal Handling Services are concerned, these services have been rendered for handling the export containers at the port of exports and they fall in the nature of port services. Further, I find that the Terminal Handling Services have been held to be specified services.”
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