2017 (5) TMI 551 - AT - Central Excise

CENVAT credit - input services - Shipping Services - Documentation Charges - Terminal Handling charges - denial on the ground that services have been availed beyond the factory gate and hence, the credit of services availed after the place of removal is not admissible - Held that - the issue of admissibility of input services credit on Shipping Service, Documentation Charges and Terminal Handling Charges used in respect of export of goods is no longer res-integra, and stands decided in the appellant s own case M/s. Jotindra Steel And Tobes Ltd. Versus CCE, Delhi-iv 2014 (6) TMI 517 - CESTAT NEW DELHI , where it was held that for export purposes, the place of removal get extended to the load port, the Shipping services availed at the port have to be held as cenvatable input services within the meaning of clause (l) of Rule 2 of the CCR, 2004 - credit allowed. Regarding contention of the Revenue that assessee should have claimed refund of service tax instead of availing the Cenvat credit, it was held in the case of M/s. Jotindra Steel And Tobes Ltd. Versus CCE, Delhi-iv that two option having been extended to the assessee, it is his choice to avail any one such option. Appeal dismissed - decided against Revenue.

Summary

Issues:
Admissibility of input services credit on Shipping Services, Documentation Charges, and Terminal Handling charges in relation to exports.

Analysis:
The appeal was filed by the Revenue against the order of the Commissioner (Appeals) granting the benefit of input services credit on Shipping Services, Documentation Charges, and Terminal Handling charges used in exports by the respondent, who manufactures various items. The Revenue contended that the respondent should have availed the benefit of refund under specific notifications and argued that services availed beyond the factory gate are not admissible as credit under the Cenvat Credit Rules, 2004.

The respondent's advocate referred to a previous Tribunal decision in their favor on a similar issue, emphasizing that the Tribunal had ruled in their favor regarding the admissibility of input services credit for such services used in export. The Tribunal had held that services like Shipping Services, Documentation Charges, and Terminal Handling charges are considered cenvatable input services for exports, extending the place of removal to the load port.

The Tribunal further explained that the appellant had the option to either claim Cenvat credit or seek a refund of the service tax paid on the mentioned services, as per the notifications. Citing a Supreme Court case, it was clarified that when two options are available to an assessee, they have the discretion to choose either scheme. Therefore, the order of the Commissioner (Appeals) was upheld as it was found to be without any flaw.

Conclusively, the Tribunal dismissed the appeal filed by the Revenue, affirming the decision of the Commissioner (Appeals) and maintaining that the input services credit on Shipping Services, Documentation Charges, and Terminal Handling charges for exports was admissible, based on the previous Tribunal ruling and the assessee's choice between credit availment and refund claim.