2012 (4) TMI 409 - AT - Service Tax

Denying Cenvat Credit availed in respect of goods transport services for transportation of empty container to factory for stuffing of export final products and re-transportation to the port of the export - imposing the interest and penalty on the appellant Held that - The appellant is liable for availment of CENVAT Credit in respect of freight charges paid by the appellant for bringing in the empty containers as held in CCE, Jaipur vs. Nitin Spinners Ltd.( 2009 - TMI - 76078 - CESTAT, NEW DELHI) stating that containers are used for packing the final products thus can be treated as inputs used by the manufacturer in or in relation to the manufacture of final products - Notification no. 18/2009-ST dated 07.07.2009 exempts the taxable service received by an exporter in respect of the transport of goods from place of removal to port of export therefore,appellant is entitled to avail credit of Service Tax in respect of these charges also in favour of assessee

Summary

Issues:
- Admissibility of CENVAT credit for transportation of empty containers and loaded containers to the port of export.

Analysis:
1. Background: The appeal was filed by M/s Century Rayon against the order-in-appeal denying CENVAT credit for transportation of empty containers to the factory and loaded containers to the port of export.

2. Appellant's Argument: The appellant contended that transportation services for empty and loaded containers were related to the export of goods, making them eligible for CENVAT credit.

3. Legal Precedents: The appellant cited Tribunal decisions in similar cases to support their argument, emphasizing the inclusion of transportation of empty containers in the concept of transport of export goods.

4. Revenue's Position: The Authorized Representative for the Revenue reiterated the lower authority's findings, opposing the appellant's claim for CENVAT credit.

5. Judgment: The issue before the Tribunal was whether the appellant could avail CENVAT credit for service tax paid on transportation of empty and loaded containers. The Tribunal referred to the precedent set in the case of Nitin Spinners Ltd., allowing CENVAT credit for freight of empty containers for export. Furthermore, the Tribunal noted that transportation charges from the factory to the port were exempted under a specific notification for exporters. The Tribunal concluded that the appellant was entitled to avail CENVAT credit for both empty and loaded container transportation, as these charges were related to the export of goods. The Tribunal emphasized that the failure to split these charges separately did not disqualify the appellant from claiming CENVAT credit.

6. Outcome: The Tribunal allowed the appeal, granting the appellant the right to avail CENVAT credit for transportation services related to empty and loaded containers for export. The judgment was pronounced on 09.03.2012.