CENVAT credit on export transportation services allowed for empty containers and stuffed containers linked to FOB exports.

CENVAT credit was treated as admissible on service tax paid for transporting empty containers from the yard to the factory for stuffing export goods, because that movement formed part of the export transportation chain. Credit was also allowed on transportation of stuffed containers from the factory to the port of export, as the service was connected with export activity and was covered by Notification No. 18/2009-ST dated 07.07.2009 for transport from the place of removal to the port. The fact that the export was on FOB basis and the charges were included in export value did not defeat credit merely because the amounts were not separately itemised.

---

---

Issues: Whether CENVAT credit of service tax paid on transportation of empty containers from the yard to the factory for stuffing of export goods, and on transportation of the stuffed containers from the factory to the port of export, was admissible.

Analysis: The transportation of empty containers for stuffing of export goods was treated as part of the export transportation chain, and credit was held admissible on the strength of earlier Tribunal decisions allowing such freight as related to export activity. For transportation from the factory to the port, the service was regarded as connected with export goods, and Notification No. 18/2009-ST dated 07.07.2009 was relied upon to note that such transport from the place of removal to the port of export was exempt. Since the export was on FOB basis and the charges formed part of the export value, the payment of service tax on these services did not disqualify credit merely because the amounts were not separately split.

Conclusion: The credit was admissible on both counts, and the assessee was entitled to CENVAT credit of the service tax paid on the transportation services.

---