2020 (1) TMI 361 - AT - Central Excise

CENVAT Credit - input services - services of fumigation of export containers at port - denial of credit on the ground that it is used beyond the place of removal and the service has no nexus with the manufacture of the goods - HELD THAT - The fumigation service is used for fumigation of export containers wherein the export goods are stuffed exported. This service is performed at port of export - It has been consistently held that all the services used in respect of export of goods up to the port of export are considered well within the place of removal. In case of export beyond the port of export is only out of place of removal. The denial of credit on the ground that the service was used beyond the place of removal is factually and legally incorrect - appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether the appellant is entitled to Cenvat Credit for fumigation services of export containers at the port.

Analysis:
The issue at hand pertains to the entitlement of the appellant for Cenvat Credit concerning the fumigation services of export containers at the port. The lower authorities had denied the credit on the basis that the service was used beyond the place of removal and lacked nexus with the goods' manufacture. However, the appellant contended that the fumigation service was utilized for exporting goods, thus making the credit admissible. The appellant cited various judgments in support of their claim, emphasizing that the service was integral to the export process. Additionally, the Commissioner (Appeals) had previously allowed the credit on the same services, further strengthening the appellant's position.

Upon hearing both parties and examining the records, it was established that the fumigation service in question was indeed utilized for fumigating export containers at the port of export, where goods were stuffed and shipped. The service was deemed crucial for the export process up to the port of export, falling well within the place of removal. Export beyond the port of export was considered as outside the place of removal. The judgment cited by the appellant's counsel directly supported the appellant's case, emphasizing the legitimacy of claiming credit for such services. Consequently, the impugned order denying the credit on the grounds of being beyond the place of removal was deemed factually and legally incorrect. Thus, the appellate tribunal set aside the impugned order and allowed the appeal, affirming the appellant's entitlement to the Cenvat Credit for the fumigation services utilized in the export process.