2011 (8) TMI 953 - AT - Service Tax

Whether appellant entitled to CENVAT credit of the service tax paid on Clearing and Forwarding Agent s Service (CFA services) availed by them for clearing their final product from factory to port for export Held that - CENVAT credit on CFA service was admissible where the place of removal was port and the goods cleared and forwarded by the CFA were exported. order is set aside and this appeal is allowed

Summary

Issues:
Entitlement to CENVAT credit on "Clearing and Forwarding Agent's Service" for export goods.

Analysis:
The appeal involved the question of whether the appellant was entitled to CENVAT credit for the service tax paid on "Clearing and Forwarding Agent's Service" (CFA services) used for clearing their final product for export from the factory to the port during the period of dispute (April 2006 to June 2008). The department issued a show-cause notice to deny the credit, recover the amount with interest, and impose a penalty. The original authority confirmed the demand, ordered recovery of interest, and imposed a penalty equal to the sum of service tax and education cess on the party. The appeal was filed against this order.

Upon examination of the records, it was noted that the appellant had availed CFA services for clearing their final product to the port for export. The Tribunal's judgment in Rawmin Mining and Indus. Ltd. Vs. CCE, Bhavnagar was cited, which held that CENVAT credit on CFA service was admissible when the place of removal was the port and the goods cleared and forwarded by the CFA were exported. Other decisions supporting the admissibility of CENVAT credit on similar services were also cited by the appellant's consultant. The learned SDR cited decisions of learned single members that contradicted this view. However, these decisions did not involve the same factual scenario as in the present case.

The judgment concluded that the appellant was entitled to the credit in question based on the precedents and the specific circumstances of the case. As the appeal succeeded on merits, there was no need to examine the time bar issue. The impugned order was set aside, and the appeal was allowed with consequential relief, if any. The judgment was pronounced and dictated in an open court.

This detailed analysis of the judgment highlights the key legal issues, arguments presented by both parties, relevant case laws cited, and the final decision reached by the Appellate Tribunal CESTAT, Bangalore regarding the entitlement to CENVAT credit on CFA services for export goods.