2011 (7) TMI 455 - AT - Service Tax

Input services - Cenvat credit - Customs House Agent and Clearing & Forwarding Agency - Rule 15 of CENVAT Credit Rules 2004 - Revenue has raised all sorts of pleas to impress upon the fact that such services cannot be held as input service so as to allow availment of credit. Reference stand made to various decisions which I find are not in respect of export of the goods - it is undisputed that the goods have been sold on FOB value to the foreign buyers and the possession of the same remains with the appellant till it reaches port of export - Appeal is rejected - Decided in favor of assessee.

Summary

Issues:
Dispute over availment of CENVAT Credit for Service Tax paid on services of Customs House Agent and Clearing & Forwarding Agency for export of goods.

Analysis:
The dispute in the present appeal revolves around the availment of CENVAT Credit for Service Tax paid on services provided by a Customs House Agent and Clearing & Forwarding Agency for the export of goods. The Revenue contended that these services do not have a nexus with the manufacture and clearance of the final product from the place of removal, thus not falling under the definition of input service as per Rule 2(l) of CENVAT Credit Rules, 2004. Consequently, a Show Cause Notice was issued proposing to deny the credit of Rs.7,914, which was later confirmed along with interest and penalty.

The assessee challenged this decision before the Commissioner(Appeals), arguing that in the case of export goods, the port from where the goods are exported should be considered the place of removal, not the factory gate. They relied on Tribunal decisions supporting this view. The Commissioner(Appeals) agreed with the respondent, citing previous decisions and the Mumbai High Court's ruling, emphasizing that while these services may not be directly related to manufacturing, they are crucial for the clearance of the final product and business activities. Consequently, the appeal of the respondent was allowed.

Upon further review, the Appellate Tribunal noted that the Revenue's arguments did not address the specific context of services availed for export of goods. It was established that for export purposes, the port area should be deemed the place of removal. The Tribunal found that the Revenue failed to challenge the applicability of the decisions cited by the Commissioner(Appeals) and did not provide grounds to refute the established facts regarding the export process. Therefore, the Tribunal upheld the Commissioner(Appeals)'s decision, as it aligned with previous rulings and correctly interpreted the law in the context of export services. Consequently, the appeal filed by the Revenue was rejected.