2018 (2) TMI 1854 - AT - Central Excise

CENVAT Credit - input services - CHA services - Port Services - lab analyses charges - Held that - Te Lower Authorities were in error in denying the Cenvat Credit to the appellant in respect of the Service Tax paid on C&F charges, CHA services which were undoubtedly in respect of goods cleared for export. It is the settled law, the goods which were cleared for export on, and the place of removal is considered on the port for export. It is the view of the C.B.E. & C. in Circular No. 267/13/2015-CX8, dated 28-2-2015. Service Tax paid on the lab analyses charges - Held that - The appellant has been claiming from the adjudication level that the said lab analysis on in respect of water charges which were used for manufacture i.e. fungisides cleared for export - these services are rendered in relation to the manufacturing activity of the appellant. Credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues involved: Denial of Cenvat credit on Service Tax paid on CHA services and Port Services for exported goods, and denial of credit on lab analysis charges for manufacturing activities.

Analysis:
1. The issue in this case revolves around the denial of Cenvat credit on Service Tax paid on CHA services and Port Services for goods exported by the appellant, along with the denial of credit on lab analysis charges for manufacturing activities. The Adjudicating Authority and the First Appellate Authority held that services rendered on goods cleared from the factory premises cannot be considered as services related to manufacturing, citing the judgment of the Hon'ble Supreme Court in Ispat Industries Ltd. (2015). They concluded that credit is not allowable for input services of CHA and C&F services on already cleared goods, as well as for lab analysis charges on water not used in the final products manufactured by the appellant.

2. The appellate tribunal found errors in the lower authorities' decision to deny Cenvat Credit to the appellant for Service Tax paid on C&F charges and CHA services related to goods cleared for export. The tribunal highlighted that goods cleared for export at the port are considered to have their place of removal there, as per Circular No. 267/13/2015-CX8. Therefore, the tribunal held that the appellant is eligible for Cenvat credit on these services.

3. Regarding the Service Tax paid on lab analysis charges, the tribunal acknowledged the appellant's claim that the analysis was for water used in manufacturing fungicides cleared for export, thus directly related to the manufacturing activity. Consequently, the tribunal concluded that the appellant is entitled to avail Cenvat credit on the Service Tax paid for both the CHA services and lab analysis charges. The impugned order was set aside, and the appeal was allowed.

This detailed analysis of the judgment provides insights into the reasoning behind the decision to allow the Cenvat credit for the disputed services and charges, based on legal interpretations and precedents cited during the proceedings.