Matrix Clothing Private Ltd. Vs CCE & ST (CESTAT Chandigarh)
Introduction: In a recent decision, the CESTAT Chandigarh ruled in favor of Matrix Clothing Private Ltd., granting a refund of service tax for various specified services, including Terminal Handling Services, GTA (Goods Transport Agency) services, and CHA (Customs House Agents) services. The case revolves around the eligibility of these services for a refund under relevant notifications.
Detailed Analysis:
1. Background of the Case: Matrix Clothing Private Ltd. is engaged in the export of readymade garments and is registered with the Central Excise Department. They sought a refund of service tax paid on specific services utilized for exporting goods. These services included Terminal Handling Services, GTA services, and CHA services.
2. Notification and Exemption: As per Notification No. 40/2007 S.T. dated 17.09.2007 and Notification No. 41/2007 S.T. dated 06.10.2007, certain specified services received and used by exporters for exporting their goods were exempted from service tax. Matrix Clothing Pvt. Ltd. claimed a refund of service tax paid on these services.
3. Rejection of Refund: A show cause notice was issued, alleging that Matrix Clothing Pvt. Ltd. failed to establish a correlation between the input services and the export of goods. It was further claimed that the appellant did not produce proper documents to support their refund claim. Subsequently, the refund claim was rejected by the original authority, and this decision was upheld by the Commissioner (Appeals).
4. Appellant’s Argument: The appellant contended that Terminal Handling Services, specifically rendered for handling export containers at the port of exports within the port area by authorized service providers, qualified as port services. They argued that service tax paid on these services was eligible for a refund under Notification No. 41/2007 dated 06.10.2007. The appellant cited several judicial precedents in support of their claim.
5. GTA and CHA Services: Matrix Clothing Pvt. Ltd. also asserted that the GTA services were utilized to transport goods from their factory to the port of export, and they provided evidence of the direct transportation of goods to support their case. Additionally, they claimed that CHA services were specifically covered by the Notification, and they provided bills from CHA containing details correlatable to export invoices and shipping bills.
6. CESTAT Decision: The CESTAT Chandigarh ruled in favor of Matrix Clothing Private Ltd. They held that Terminal Handling Services, GTA services, and CHA services were eligible for a refund based on the evidence provided and relevant notifications. The decision was in line with various previous decisions and legal precedents cited by the appellant.
Conclusion: In a significant decision, the CESTAT Chandigarh granted Matrix Clothing Private Ltd. a refund of service tax for specified services, including Terminal Handling Services, GTA services, and CHA services. The tribunal’s decision reaffirmed the eligibility of these services for a refund under relevant notifications and highlighted the importance of providing proper documentation to support refund claims. This case serves as a reminder to businesses engaged in exports to diligently pursue eligible refund claims and comply with tax regulations.
FULL TEXT OF THE CESTAT CHANDIGARH ORDER
The present appeal is directed against the impugned order dated 15.10.2010 passed by the Commissioner (Appeals) whereby the Commissioner (Appeals) has rejected the refund claim of Rs. 4,67,317/- by upholding the order in original.
2. Briefly the facts of the case are that the appellant 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 S.T. 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. Accordingly, the appellant opted for availing the refund as per the Notification towards the services used for exporting the goods out of India.
The Appellant filed a refund claim pertaining to the service tax paid on following taxable services utilized by the Appellant for export of goods:-
|
Nature of Input Service |
Amount of Service Tax claimed as refund (INR) |
| Clearing and Forwarding Agents services (port services) provided at port rendered by various service providers (Terminal Handling Services) | 2,06,350/- |
| Transportation of goods from place of removal to port (“GTA services”) | 89,308/- |
| Customs House Agents (“CHA”) services | 1,71,659/- |
| Total Refund Amount |
4,67,317/- |
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.
- After following due process, the refund was rejected by the original authority and on appeal before the Commissioner (Appeals), the Ld. Commissioner (Appeals) upheld the order-in-original and rejected the appeal of the appellant.
- Hence, the present appeal.
3. Heard both the parties and perused the records.
4. Ld. 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. She 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. She further submits that the service tax paid on such services are clearly eligible for refund under the Notification No. 41/2007 dated 06.10.2007. For this Submission, she relied upon the following decisions:-
