2019 (6) TMI 181 - AT - Central Excise

Refund of CENVAT credit unutilized and accumulated credit - input services - C F charges for export of goods - place of removal - HELD THAT - The CENVAT credit is denied on C F charges for export of goods up to Chennai Port on the ground that port of export is Bangalore ICD and not the Chennai Port by relying upon the Board s Circular No.999/6/2015-CX dt. 28/02/2015 - in the present case, as per the Bill of Lading, the port of loading is the Chennai Port and not the ICD Bangalore. It has been consistently held by the Tribunal that in the case of export of goods, port is the place of removal where the actual loading of goods happens and till that place, all the services fall in the definition of input services and are eligible for cenvat credit. Refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Appeal against order allowing Department's appeal and setting aside refund sanction on CENVAT credit for C&F charges for export of goods up to Chennai Port.

Analysis:
1. Facts and Refund Claims: The appellants, engaged in manufacturing and exporting excisable goods, filed refund claims for unutilized CENVAT credit on inputs and service tax paid on input services used in manufacturing finished goods cleared for export. Original authority sanctioned the refunds, but Department observed discrepancies in C&F charges for goods exported to Chennai Port.

2. Department's Appeal: Department filed appeals before Commissioner(Appeals) challenging the sanctioned refunds on C&F charges. Commissioner(Appeals) allowed the appeals, directing recovery of amounts sanctioned in violation of the Board's circular, leading to the appellant's challenge through two appeals.

3. Appellant's Arguments: The appellant's consultant argued that the impugned order lacked legal sustainability, emphasizing that goods were shipped from Chennai Port despite initial processing at Bangalore ICD. The consultant highlighted the lack of detailed breakdown in CHA charges and transportation costs, asserting that the Department's rejection of CENVAT credit lacked sufficient evidence.

4. Legal Analysis: The Tribunal analyzed the Bill of Lading, confirming Chennai Port as the loading point. Relying on precedents like CCE, Raipur vs. Bhilai Engineering Corporation Ltd., the Tribunal determined that the port of loading constitutes the place of removal in export scenarios. Consequently, all services until the loading point qualify as input services eligible for CENVAT credit, leading to the setting aside of the impugned order and allowing the appeals with consequential relief.

5. Conclusion: The Tribunal found in favor of the appellant, emphasizing the legal precedence and factual evidence supporting the eligibility of CENVAT credit on C&F charges for goods exported to Chennai Port. The decision reiterated the importance of the loading port as the place of removal in export transactions, ensuring the rightful availment of input service credits under the CENVAT Credit Rules, 2004.