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2010 (1) TMI 1188 - AT - Service TaxCENVAT credit - input service - denial on the ground that the impugned activity was not carried out at the place of manufacture/place of removal, the impugned services could not be considered as input service - Held that - As per the clarification issued by the CBEC vide Circular No. 91/8/2007, dated 23-8-2007, place of removal appearing in the Cenvat Credit Rules covers the place at which the ownership of finished goods are transferred - In the instant case, the export goods are sold on FOB basis. The said service is availed prior to export of the goods - the appellants are entitled to credit of service tax paid under CHA services in respect of the excisable goods at the port area - credit allowed - appeal allowed - decided in favor of appellant.
Issues: Denial of refund of service tax paid on CHA services; Interpretation of 'input service' under Cenvat Credit Rules, 2004.
In this judgment by the Appellate Tribunal CESTAT Bangalore, the issue revolved around the denial of refund of service tax paid by the appellants on CHA services. The Commissioner had denied the refund, stating that the services were not used directly or indirectly in relation to the manufacture of excisable goods as they were utilized after the goods reached the port area. The appellants argued that the services were used in relation to their business activity, making the credit legitimately admissible to them. The key contention was the interpretation of 'input service' under the Cenvat Credit Rules, 2004. The Tribunal considered the rival submissions and referred to a clarification by the CBEC, which defined 'place of removal' as the place where ownership of finished goods is transferred. Since the export goods were sold on an FOB basis and the service was availed prior to export, the appellants were entitled to credit of service tax paid on CHA services at the port area. The Tribunal cited precedents, including a decision in the case of CCE, Rajkot v. Rolex Rings Pvt. Ltd., where a similar ruling was made. Additionally, a Division Bench of the Tribunal in Final Order No. 1003/2009 had held that tax paid on services related to business activities of a manufacturer was eligible for cenvat credit. This decision was based on the precedent set by the Larger Bench of the Tribunal in CCE, Mumbai v. GTC Industries Ltd. Following these precedents, the Tribunal allowed the appeal, granting the refund of service tax paid on CHA services used as input in the export of final products.
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