Synergy Seaports Pvt Ltd Vs Commissioner of C.E. & S.T. (CESTAT Ahmedabad)
Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench, has allowed an appeal filed by Synergy Seaports Pvt Ltd, directing the refund of Rs. 1,85,79,431 in service tax paid on ocean freight. The Tribunal’s decision, pronounced on September 10, 2024, set aside the earlier order of the first appellate authority which had rejected the refund claim on grounds of being time-barred.
Background of the Dispute
Synergy Seaports Pvt Ltd (hereafter, “the Appellant”) operates as a steamer agent, providing services to foreign-based vessel owners and shipping lines. The core of the dispute originated from a period between January 22, 2017, and April 22, 2017. During this time, the Government of India, through Notification No. 01/2017-ST dated January 12, 2017, withdrew the exemption from service tax on ocean freight previously granted under Notification No. 25/2012-ST.
Simultaneously, the Service Tax Rules, 1994, were amended. Specifically, Rule 2(1)(d)(EEC) was introduced, making the steamer agent liable to pay service tax under the reverse charge mechanism for the transportation of goods by a vessel from a place outside India to a customs station in India. This liability applied to steamer agents who complied with Sections 29, 30, or 38 read with Section 148 of the Customs Act, 1962.
