2015 (12) TMI 1569 - AT - Central Excise

Tribunal allows credit on services for exported goods under Cenvat Credit Rules, 2004

The Tribunal upheld the Commissioner's decision, allowing M/s Thermax Ltd.'s appeal to avail credit on services related to exported goods. The Tribunal ... Availability of CENVAT on services received outside the factory - input services - 'place of removal' as per Section 4(3)(c) of the Central Excise Act - Held that: - The decision in the case of Commissioner of Central Excise Vs. Adani Pharmachem (P) Ltd. [2008 (7) TMI 102 - CESTAT AHMEDABAD] apply where it was held that prior to 2008, the period of which the dispute relate, the definition of input service included services “used by the manufacturer where directly or indirectly, in or in relation to manufacture of final products from the place of removal”. The words “from the place of removal” were subsequently changed to “upto the place of removal” on 1.4.2008. - prior to 2008, there was no restriction on availment of input services even if, they were received after removal - CENVAT credit allowed - appeal dismissed - decided against Revenue. Issues:1. Availment of credit on services rendered by CHA, Port authorities, storage, and warehousing for exported goods.2. Interpretation of the definition of input services under Cenvat Credit Rules, 2004.3. Determination of the place of removal for goods sold in the case.Analysis:Issue 1:The respondents, M/s Thermax Ltd., availed credit of Service Tax on various services related to exported goods. The Revenue sought to deny this credit, arguing that these services did not fall under the definition of input services as per the Cenvat Credit Rules, 2004. The original adjudicating authority upheld the demand, but the Commissioner (Appeals) allowed the appeal based on established judgments. The Commissioner relied on Circular No. 97/8/2007, clarifying that credit of Service Tax paid on transportation up to the place of sale would be admissible in cases where the sale occurs at the destination point. Consequently, the Commissioner allowed the appeal of the respondents.Issue 2:The Revenue appealed the Commissioner's decision, contending that the Port premises where the goods were sold could not be considered a depot or storage place under Section 4(3)(c) of the Central Excise Act. The Revenue argued that there was no evidence requiring the respondents to deliver goods up to the Port and emphasized the need for a contract between the assessee and buyers for availing CENVAT Credit. The appeal referenced legal precedents, including decisions from the Bombay High Court and the Supreme Court, to support the argument that certain services related to exports were not linked to the manufacturing process and clearance from the factory.Issue 3:The respondent's counsel relied on Tribunal decisions in similar cases to support their position. They highlighted that prior to 2008, the definition of input service included activities related to business used by the manufacturer directly or indirectly in or in relation to the manufacture of final products. The counsel argued that the definition encompassed the activities for which credit was sought. The Tribunal considered the arguments presented by both sides and concluded that the issue of availing credit on services received outside the factory was adequately addressed in previous decisions. Consequently, the Tribunal dismissed the Revenue's appeal, citing the precedent set by earlier Tribunal decisions.In conclusion, the Tribunal upheld the Commissioner's decision to allow the respondents' appeal, emphasizing the relevance of established legal interpretations and precedents in determining the eligibility of credit on services related to exported goods.