Credit of tax on services availed till port are admissible in case of exports.

PJ/Case law/2014-15/2280

Case:- RAJDHANI CRAFTS Vs COMMISSIONER OF CENTRAL EXCISE, JAIPUR

Citation:- 2013 (32) S.T.R. 607 (Tri. - Del.)

Brief facts:- The appellants were a 100% Export Oriented Unit registered for manufacture and export of wooden furniture. They had taken Cenvat credit for Service Tax paid on various services like transportation of goods from the factory to the port, services of the Custom House Agents and terminal handling charges and similar other charges incurred within the port area. Since they were not able to utilise the Cenvat credit taken for payment of Excise duty, they claimed refund of such credit under Rule 5 of the Cenvat Credit Rules, 2004. At that stage Revenue took the objection that the services could not be considered as input services and refund was rejected on the ground that they were not eligible for the credit.

Appellant’s contentions:- The Counsel for the appellant submitted that the issue whether transportation from factory to the port was an input service was already decided in the case of CST v. ABB Limited - 2011 (23) S.T.R. 97. She also submits that the issue whether Cenvat credit can be availed on the services of Custom House Agent, had been decided by the Tribunal in the case of CCE v. Rolex Rings P. Ltd. - 2008 (230) E.L.T. 569 (Tri.-Ahmd.). Therefore, on these two services there cannot be any doubt that these were input services. In respect of other services, she submits that they were essentially of the same nature as in the case of the services of Custom House Agent and such services were required for exporting the goods. Since services utilised for business was considered as input services, there was no reason to deny the Cenvat credit.

Respondent’s contentions:- The AR for Revenue submits that though there were decisions in the case of services of outward transportation and Custom House Agent, there were no clear decisions in the case of other services and those cannot be considered as input services.

Reasoning of judgment:- After considering arguments on both the sides Hon’ble judge found that the issue was already settled in the case of services of outward transportation and Custom House Agent. The other services were essentially of the same nature as that of Custom House Agent in the matter of eligibility for taking Cenvat credit, therefore he found merit in the argument of the appellants and allow the appeal filed by the appellants with consequential benefits.

Decision:-Appeal allowed.

Comment:- The analogy drawn from the case is that the services of transportation availed from factory to port, services of Custom House Agent and other related services which are required for exporting the goods are considered as input services and there lies no reason to deny the Cenvat credit. The reason for the same being that in case of exports, the place of removal is the place of port.

Prepared by: Ranu Dhoot

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PJ/Case law/2014-15/2280

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