2012 (12) TMI 105 - AT - Central Excise

Cenvat Credit on GTA Services - Whether factory gate at the port of export would be the place of removal when the goods are cleared for export with bond held that - Respondent would be eligible for cenvat credit of service tax paid on GTA services availed for transportation of the goods from the factory to the port from where the goods were placed on board the vessel for export to their overseas buyer - issue stands decided in favour of the respondent as per judgment of Tribunal, that the respondent s contract with the overseas buyers was on C&F basis; that in view of this, the place of removal would be the port from where the goods were exported no merit in the revenue s appeal - same is dismissed.

Summary

Issues:
1. Eligibility for cenvat credit of service tax paid on GTA services for transportation of goods from factory to port for export.

Analysis:
The dispute in this case revolved around the eligibility of the respondent for cenvat credit of service tax paid on GTA services used for transporting goods from the factory to the port for export under ARE-1. The department contended that the place of removal should be the factory gate, not the port of export. The AC disallowed the cenvat credit, leading to an appeal before the CCE (Appeals), where the order disallowing the credit was set aside. The Revenue then filed an appeal against this decision. The matter was referred to a Division Bench to determine whether the factory gate at the port of export should be considered the place of removal for goods cleared for export with a bond.

During the hearing, the ld. DR for the Revenue argued against the impugned order, claiming it was contrary to the law. On the other hand, the ld. Advocate for the respondent argued that since the contract with overseas buyers was on C&F basis, the port of export should be considered the place of removal. He cited various judgments, including those of the Hon'ble Gujarat High Court and Tribunal decisions, supporting this view. After considering both sides' submissions and reviewing the records, the Tribunal found that the issue had been settled in favor of the respondent by previous Tribunal judgments, including those of Division Benches. Therefore, the Tribunal upheld the respondent's eligibility for cenvat credit and dismissed the Revenue's appeal.