2019 (2) TMI 1023 - AT - Central Excise

CENVAT Credit - input services - Customs House Agent (CHA) - Port Services - Steamer Agent Services - services at the Port of shipment for export of its finished goods on F.O.B. basis - period Feb 2011 to May 2014 - Held that - Admittedly, such services have been utilized by the appellant in carrying out the export of the goods manufactured in their factory - There is no dispute about the fact that the goods have been exported. In such cases the place of removal is the port where the export of goods is loaded on to the vessel. Hon ble High Court of Gujarat in the case of inductotherm India Pvt. Ltd. 2014 (3) TMI 921 - GUJARAT HIGH COURT has granted the credit of CENVAT Credit for Cargo Handling Services used for clearance of final product from the port for export - Even though, the Hon ble High Court has held that with regard to Cargo Handling service , the same ratio will be applicable to all three services which are in dispute before us since, all of them have been rendered in the port for export of goods. Credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Denial of CENVAT Credit for services used in the export of goods
- Interpretation of input services under CENVAT Credit Rules, 2004

Analysis:
The case involved a dispute regarding the denial of CENVAT Credit for services utilized in the export of goods by a manufacturing company. The appellant, engaged in the manufacture and export of Ductile Iron pipes and fittings, availed CENVAT Credit of service tax on services like Customs House Agent (CHA), Port Services, and Steamer Agent Services for exporting finished goods. The issue revolved around whether these services qualified as input services under the CENVAT Credit Rules, 2004. The Adjudicating Authority denied the credit, stating that the services were used outside the factory premises and not in relation to the manufacture of finished goods.

Upon hearing arguments from both sides, the appellant's counsel contended that the services were used up to the place of removal, including the port, which should qualify as input services for export of goods. The counsel cited various case laws to support this argument. On the other hand, the Department justified the denial of CENVAT Credit, claiming that the services were only used to clear goods from the port and not up to the place of removal.

After careful consideration and perusal of the case records, the tribunal noted that the services in question - CHA Services, Port Services, and Steamer Agent Service - were indeed utilized by the appellant for exporting goods manufactured in their factory. The definition of input service under the CENVAT Credit Rules, 2004 was examined, emphasizing services used in or in relation to the manufacture of final products and clearance of final products up to the place of removal. The tribunal acknowledged that in export cases, the port where goods are loaded onto the vessel constitutes the place of removal.

Referring to a precedent set by the Hon'ble High Court of Gujarat in a similar case, the tribunal concluded that services like Cargo Handling Services used for clearance of final products from the port for export should be considered as input services eligible for CENVAT Credit. Therefore, the tribunal extended this interpretation to all three disputed services, ruling in favor of the appellant. The impugned orders denying CENVAT Credit were set aside, and the appeals were allowed in favor of the appellant.