2013 (6) TMI 440 - AT - Central Excise

CENVAT Credit - Export - Refund - Service Tax paid on Clearing & Forwarding charges (CHA charges) for export. - place of removal - Held that - the ground of appeal raised by the Department are incorrect in as much as a series of judgments of the Tribunal has held clearly that the services rendered by CHA for clearance of the goods for export will be eligible for CENVAT Credit for the export of the goods, the place of removal is considered as port of airport. - this Bench has been taking a consistent view that the CENVAT Credit of the Service Tax paid by the CHA will be eligible as CENVAT Credit. - Credit allowed.

Summary

Issues:
- Admissibility of CENVAT Credit on Clearing & Forwarding charges for export
- Interpretation of place of removal for CENVAT Credit eligibility

Issue 1: Admissibility of CENVAT Credit on Clearing & Forwarding charges for export

The appeal was against the Order-in-Appeal confirming the disallowance of CENVAT Credit of Service Tax on Clearing & Forwarding charges for export. The Department contended that the service provided by the Clearing & Forwarding Agent (CHA) was beyond the place of removal and thus not eligible for CENVAT Credit. The respondent argued in favor of admissibility based on various Tribunal decisions, including Adani Pharmachem Pvt. Ltd., Rolex Rings Ltd, Rawmin Mining & Industries Ltd, and Colour Synth Industries Ltd. The Tribunal found that a consistent view had been taken that services by CHA for clearance of goods for export were eligible for CENVAT Credit, considering the place of removal as the port or airport. The Tribunal cited the case of Meghachem Industries, where it followed the judgment of the Hon'ble High Court of Mumbai in Ultratech Cement Ltd, to support this conclusion.

Issue 2: Interpretation of place of removal for CENVAT Credit eligibility

The Revenue's appeal focused on the amendment to the definition of input services, arguing that the place of removal was limited to the factory gate, and services provided by the CHA beyond the port were not part of the place of removal. However, the Tribunal disagreed with this argument, citing previous judgments that clarified the place of removal for CENVAT Credit eligibility in the context of services by a CHA for export clearance. The Tribunal emphasized that the place of removal for export goods was considered as the port or airport, making the Service Tax credit on CHA services admissible. The first appellate authority's decision to allow the CENVAT Credit based on favorable judicial pronouncements was upheld, confirming the correctness and legality of the impugned order.

In conclusion, the Tribunal rejected the appeal and disposed of the cross-objection, affirming the admissibility of CENVAT Credit on Clearing & Forwarding charges for export based on the interpretation of the place of removal as the port or airport in line with established judicial precedents.