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2013 (10) TMI 253 - AT - Service TaxCenvat Credit Waiver of Pre-deposit - input services - wharfage charges - Whether services availed up to the Port of loading in an FOB contract should be admitted or not, has been referred to Larger Bench in the case of Deepak Fertilizers Petrochemicals Corporation Limited vs. CCE Belapur 2013 (4) TMI 44 - BOMBAY HIGH COURT wherein, it has been noted that some coordinated benches of CESTAT have held that place of removal in FOB contracts shall be Port of loading and the GTA service utilised from the factory to the Port should be considered as input services - In view of the fact that matter stands referred to the Larger Bench of the Tribunal, the appellant has made out a prima facie case for complete waiver of confirmed dues, interest and penalty - Stay Granted.
Issues involved:
Service tax credit on wharfage charges paid to M/s. Dahej Harbour Infrastructure Limited by the appellant. Analysis: The appellant filed a stay application against Order-in-Appeal No. PJ/621/VDR-II/2013-14 dated 26.3.2013, concerning the issue of service tax credit on wharfage charges. The appellant, represented by Shri Jigar Shah, argued that based on various judgments, the issue is settled for export of goods under FOB contracts, making all services availed till goods are loaded eligible for cenvat credit. The judgments cited included cases like Deepak Fertilizers Petrochemicals Corporation Limited vs. CCE, Belapur, and Coca Cola India Pvt. Limited vs. CCE, Pune. On the other hand, Dr. J. Nagori, representing the Revenue, contended that credit for services post goods removal from factory premises is inadmissible, citing the judgment in CCE Jaipur vs. Hindustan Zinc Limited. It was highlighted that the issue of whether the port of loading in FOB contracts should be considered as the place of removal has been referred to a Larger Bench. The analysis of the case records revealed that the Hon'ble Bombay High Court in Deepak Fertilizers Petrochemicals Corporation Limited vs. CCE Belapur emphasized the broad and comprehensive definition of 'input service' under Rule 2(l) of the legislation. The Court clarified that the restriction on availing CENVAT credit for services used in relation to inputs only for procurement and inward transportation of inputs, as interpreted by the Tribunal, was contrary to the rule's provisions. The Court emphasized that input services used directly or indirectly in or in relation to the manufacture of final products are eligible for credit, irrespective of their location outside the factory premises. It was noted that the issue of services availed up to the Port of loading in FOB contracts has been referred to a Larger Bench, indicating a prima facie case for a stay on recovery of confirmed dues and penalties until the appeal's disposal. In conclusion, the judgment highlighted the interpretation of the rules governing service tax credit on wharfage charges paid by the appellant to M/s. Dahej Harbour Infrastructure Limited. The legal analysis focused on the applicability of cenvat credit for services used in the manufacturing process, emphasizing the broad definition of 'input service' and the ongoing debate regarding the treatment of services in FOB contracts. The reference to a Larger Bench indicated the complexity of the issue, leading to a stay on the recovery of confirmed dues and penalties pending further resolution.
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