2012 (9) TMI 747 - AT - Service Tax

CENVAT credit - Custom House Agent services and terminal handling charges - Held that - As in the case of F.O.B. exports load port has to be considered as place of removal and therefore credit is admissible -the place of removal has to be considered as the port where the goods are put on board the ship or the aircraft as the case may be - in favour of assessee.

Summary

Issues: Availment of cenvat credit on Custom House Agent services and terminal handling charges for export consignments.

Analysis:
The case involved the appellant availing cenvat credit on services related to export consignments, which the department claimed did not qualify as input services under Rule 2(1) of Cenvat Credit Rules, 2004. A show cause notice was issued, leading to an order confirming the demand for the credit amount with interest and imposing a penalty.

Upon appeal, the Commissioner ruled in favor of the appellant, allowing the credit. The Revenue then filed an appeal challenging this decision.

The appellant's argument against the admissibility of credit was based on the premise that credit is only available up to the place of removal, which, in this case, was the factory gate, while the credit was claimed for export goods. The Commissioner justified the credit by referencing previous Tribunal decisions, namely CCE Vs. Adani Pharmachem Pvt. Ltd., CCE Rajkot Vs. Rolex Rings Pvt. Ltd., and CCE Vs. Vhamundi Textiles (Silk Mills) Ltd., which held that for F.O.B. exports, the load port should be considered the place of removal, making the credit admissible.

The judgment upheld the Commissioner's decision, citing the lack of contrary decisions from higher authorities to challenge the Tribunal's rulings relied upon by the Commissioner. As a result, the Revenue's appeal was dismissed, affirming the allowance of cenvat credit on the services in question.