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2015 (12) TMI 1268 - AT - Service TaxDenial of CENVAT Credit - input service - Clearance of goods from factory gate - Held that - The fact is that the ownership of the goods and the risks related thereto remain with the respondent at least up to the loading of the goods on the ship at the port of shipment. Section 4 of the Central Excise Act, 1944 inter alia states that the place of removal is any other place from where the excisable goods are to be sold after the clearance from the factory . Thus, the place of removal is in case of export goods in the port of shipment. The CHA services are utilised by the respondent before the goods were loaded onto the ship. The decision of Ultra Tech Cement (2007 (3) TMI 738 - CESTAT AHMEDABAD) cited by Revenue only states that prima facie there for services beyond the stage of manufacture and clearance of goods from the factory could not be input services . It is evident that CESTAT had only given a prima facie view in the case of Ultra Tech Cement (supra) and therefore the said judgement has no value as a precedent. - no merit in Revenue s appeal - Decided against Revenue.
Issues:
Appeal against disallowance of input service credit for CHA services used in export. Analysis: The appeal was filed by Revenue against the Order-in-Appeal that set aside the disallowance of input service credit for CHA services used in export. The primary issue revolved around the eligibility of CHA services as input services under the CENVAT Credit Rules, 2004. The primary adjudicating authority disallowed the credit, stating that the service was utilized after goods clearance from the factory gate, hence not qualifying as an input service. However, the Commissioner (Appeals) relied on a CESTAT judgment in a similar case, emphasizing that the place of removal for exported goods was the port, making CHA service eligible as an input service. Revenue contended that CHA service was a post-manufacturing/clearance activity as it was availed after goods clearance from the factory gate, which they argued was the place of removal since the sale of final products for export was completed there. They referred to a CESTAT judgment in Ultra Tech Cement case to support their stance. Despite the absence of the respondent during the proceedings, the Tribunal analyzed the definition of input service under rule 2(l) of the CENVAT Credit Rules, 2004. The Tribunal noted that the ownership and risks related to goods remained with the respondent until loading onto the ship at the port of shipment, establishing the port as the place of removal for export goods. The Tribunal dismissed the relevance of the Ultra Tech Cement judgment as it only provided a prima facie view, lacking precedential value. The Tribunal further cited a Gujarat High Court judgment in the Commissioner Vs. Dynamic Industries case, which affirmed that services like CHA services were essential for exporting final products, and hence, the service tax paid on such services until goods reached the port was admissible for CENVAT credit. The court emphasized that the definition of input service should not be narrowly interpreted, considering the inclusive language used in Rule 2(l) of the CENVAT Credit Rules, 2004. Consequently, the Tribunal found no merit in Revenue's appeal and dismissed it based on the analysis presented.
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