2012 (7) TMI 412 - AT - Service Tax

Whether the respondents are entitled to avail the benefit of credit of Service Tax paid on outward GTA services availed by the respondents up to the place of removal i.e. the port area Held that - Sale or purchase of goods in case of goods cleared for export is effected by the transfer of documents of title to the goods after the goods have crossed the customs frontiers i.e. when the documents have been handed over of the Customs in the port areas. Thus, the place of removal in case of goods cleared for export is the port area Cenvat credit allowed In favor of assessee

Summary

Issues involved:
Whether the respondents are entitled to avail the benefit of credit of Service Tax paid on outward GTA services availed by them up to the place of removal, i.e., the port area.

Analysis:

Issue 1: Entitlement to credit of Service Tax on GTA services up to the port area

The Commissioner (Appeals) granted relief to the respondents based on the definition of place of removal in the context of goods cleared for export. It was noted that the transfer of documents of title to the goods occurs after the goods have crossed the customs frontiers, specifically in the port area. The Commissioner relied on precedents, including the case of CCE, Rajkot v. Rolex Rings (P.) Ltd., where it was held that services availed by the exporter till the port area are to be considered as input services related to business activities. The credit of duty paid on such services was deemed admissible. The Tribunal also referenced other cases supporting this view, emphasizing that in scenarios of sale on FOB/CIF basis, the place of removal is the load port, and the ownership and risk of goods remain with the assessee until the port of shipment. Consequently, the Tribunal affirmed that GTA service from the factory gate to the port of shipment qualifies as an input service, making the credit of service tax paid on it admissible.

Issue 2: Judicial decisions supporting the Commissioner's view

The Tribunal noted that the issue had been previously addressed by the Hon'ble High Court in the cases of CCE&ST v. ABB Ltd. and CCE&C v. Parth Poly Wooven (P.) Ltd. The decisions in these cases aligned with the Commissioner's stance, finding no flaw in the view adopted by the Commissioner (Appeals). Consequently, the Tribunal rejected the Revenue's appeals based on the consistency of the interpretation with previous judicial pronouncements.

In conclusion, the Tribunal upheld the entitlement of the respondents to avail the benefit of credit of Service Tax paid on outward GTA services up to the port area as per the established legal interpretations and precedents. The appeals, along with related applications and petitions, were disposed of accordingly.