2016 (12) TMI 1315 - AT - Central Excise

Cenvat Credit - fumigation services rendered for fumigating containers in which export goods were dispatched - Held that - On perusal of the judgment of the Tribunal in appellant s own case, I find that the issue is very same. Accordingly, following the same judgment, I find the impugned order is unsustainable and liable to be set aside - Appeal allowed.

Summary

Issues involved: Cenvat Credit eligibility for service tax paid on fumigation services for export goods.

Analysis:
1. Issue of Cenvat Credit Eligibility: The appeal questioned the eligibility of Cenvat Credit for service tax paid by the service provider for fumigation services on containers containing export goods. The revenue contended that such credit was ineligible as the service did not directly relate to the manufacturing process of the final product.

2. Judicial Precedent: The appellant's counsel highlighted a similar issue in a previous appeal before the Tribunal, where it was held that fumigation services were akin to packing expenses for export goods. The counsel presented a copy of the earlier order as evidence.

3. Lack of Evidence: The Departmental Representative argued that the appellant failed to provide evidence demonstrating the necessity of fumigation or any relevant literature supporting the need for such services. It was contended that there was no clear connection between the fumigation services and the manufactured goods.

4. Decision and Rationale: After considering both sides' arguments, the Member (Judicial) noted that the fumigation services were indeed utilized by the appellant for exporting goods in containers. Referring to the Tribunal's previous judgment in the appellant's case, it was established that the issue at hand was identical. Consequently, the Member (Judicial) upheld the earlier judgment and deemed the impugned order unsustainable, leading to its setting aside.

5. Export Principles: The Member (Judicial) addressed the revenue's argument about the taxation of exports, emphasizing the government's stance that exports should not be taxed. Disallowing the credit for service tax on fumigation services would increase the cost of exported goods, contrary to the export principles advocated by the Government of India.

6. Final Decision: Based on the above considerations, the impugned order was set aside, and the appeal was allowed in favor of the appellant. The decision was pronounced in court, concluding the matter in favor of the appellant regarding the eligibility of Cenvat Credit for service tax paid on fumigation services for export goods.