whether the appellant is allowed to avail the cenvat credit of service tax when appellant could have claimed the refund of the service tax paid?

PJ/CASE LAW/2014-15/2462

Case:- M/s JOTINDRA STEEL AND TOBES LTD Vs COMMISSIONER OF CENTRAL EXCISE, DELHI-IV

Citation:- 2014-TIOL-1039-CESTAT-DEL

Brief facts:-The appellant is engaged in the manufacture of M.S. Black Pipes, G.I. Pipes, L.P.G.V.P. Ring, H.R. Strips, M.S. Ingots, H.R. Sheets classifiable under Chapter 72-73 of the Central Excise Tariff Act, 1985 and were availing the benefit of Cenvat Credit of Service Tax paid on various services. The dispute in the present appeal relates to the Cenvat credit availed by the appellant of service tax paid on Shipping Services, Documentation charges and Terminating Handling charges etc. used in respect of export. The lower authorities have denied the credit on two grounds. First that the said services can not be held to be admissible cenvatable input services and secondly on the ground that instead of claiming the Cenvat credit, the appellant should have claimed the refund of the service tax paid on the said services in terms of Notification No. 41/2007-ST dated 06.10.2007 and subsequent Notification No. 17/2009-ST dated 07.07.2009.

Appellant’s contention:-As regards the first objection, the appellant contested that Tribunal in a number of decisions has held that inasmuch as for export purposes, the place of removal get extended to the load port, the Shipping services availed at the port have to be held as cenvatable input services within the meaning of clause (1) of Rule 2 of the Cenvat Credit Rules, 2004. Reference, in this regard, can be made to the Tribunal decision in the case of CCE V/s. Adani Pharmachem Pvt. Ltd. 2008 (232) ELT 804 (Tri. Ahmd.) = 2008-TIOL-2584-CESTAT-AHM. It stands held that as Port is place of removal for export cargo for the reasons that sale takes place only when the bill of lading is issued by the shipping company, which is issued only after the goods are loaded into the ships, the port area becomes the place of removal. As regards the second objection that the appellant should have claimed refund of service tax instead of availing the Cenvat credit, two option having been extended to the assessee, it is appellant’s choice to avail any one such option. It is not the revenues case that the notification in question, which permits refund, debars availment of credit, in case refund is not claimed. As such it is absolutely the assessee option to claim the Cenvat credit or to claim the refund. For the above proposition reliance is placed upon the Hon'ble Supreme Court in the case of Commissioner of Central Excise & Customs (Appeals), Ahmedabad Vs. Narayan Polyplast- 2005 (179) ELT 20 (SC) = 2004-TIOL-110-SC-CX-LB laying down that an assessee can choose to avail the benefit under any of the schemes, when benefits are available under two different schemes.

Reasoning of judgement:-The tribunal found that Commissioner (Appeals) in the assessee own case, for a different period has held in favour of the assessee vide his order dated 30.08.2011. It stands observed by the appellant authority that Cenvat credit was available to them and they cannot be pressurized to claim the refund in terms of notification No. 41/2007. Tribunal has also observed that the entire issue is revenue neutral inasmuch as if the appellant had not availed the credit, they were entitled to refund. Revenue has not shown whether the said order stand appealled against by them.

Decision:-appeal is allowed.

Comment:-since it is at the assessee’s disposal whether he wants to claim the refund of service tax or avail the cenvat credit on the same thus they cannot be pressurized to claim the refund in the terms of notification No.41/2007.

Submitted by:-somya jain

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PJ/CASE LAW/2014-15/2462

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