2011 (3) TMI 1099 - AT - Service Tax

Appellant entitled to modvat credit for service tax on CHA services for exports

M/s. Stovec Industries Limited Versus Commissioner of Central Excise Ahmedabad

The Tribunal held that the appellant was entitled to avail modvat credit for service tax paid on CHA services for the export of goods, citing precedent ... Modvat credit - whether the appellant is entitled to avail modvat credit in respect of service tax paid on CHA services availed at the port area, for export of their goods - Held that:- The Tribunal in the case of CCE, Ahmedabad vs. Fine Care Bio-systems [2009 (7) TMI 226 - CESTAT, AHMEDABAD] has held such services to eligible input services for the purpose of modvat credit - Again the Board Circular No. 97/8/2000-ST dated 23.08.2007 clarifies about the place of removal - The said circular has been taken note of in the case of M/s. Adani Pharmachem Pvt. Limited [2008 (7) TMI 102 - CESTAT AHMEDABAD] - Surprisingly, the Commissioner (Appeals) also takes note of the same but does not follow the same on the ground that Circular is binding on the departmental officer and not on the Courts - Decided in favour of assessee. Issues:- Entitlement to avail modvat credit for service tax paid on CHA services for export of goods- Interpretation of Board Circular No. 97/8/2000-ST regarding place of removalAnalysis:1. The main issue in this case is whether the appellant is entitled to avail modvat credit for service tax paid on CHA services for the export of goods. The Tribunal referred to precedent decisions in the cases of CCE, Ahmedabad vs. Fine Care Bio-systems and CCE Rajkot vs. Adani Pharmachem P. Limited, where such services were considered eligible input services for modvat credit. The Tribunal found the issue to be settled based on these decisions.2. Additionally, the Tribunal considered Board Circular No. 97/8/2000-ST dated 23.08.2007, which clarifies the place of removal. The circular was also noted in the case of M/s. Adani Pharmachem Pvt. Limited. However, the Commissioner (Appeals) did not follow the circular, stating that it is binding on departmental officers and not on the Courts. The Tribunal found this reasoning flawed, as the Commissioner (Appeals) is a departmental officer and should have been bound by the circular. The Tribunal expressed confusion over the Commissioner's decision to reject the appeal based on this ground.3. In light of the settled issue and the interpretation of the circular, the Tribunal set aside the impugned order and allowed the appeal. The stay petition and appeal were disposed of accordingly. The judgment was dictated and pronounced in the Court by Hon'ble Mrs. Archana Wadhwa, Member (Judicial) of the Appellate Tribunal CESTAT, Ahmedabad.