2012 (8) TMI 24 - AT - Central Excise

Appellate Tribunal allows CENVAT credit for service tax on GTA service for export

The Appellate Tribunal CESTAT, Bangalore held that the respondent could claim CENVAT credit for service tax paid on GTA service used for transporting ... CENVAT credit - definition of 'input service' under the CENVAT Credit Rules, 2004 - GTA service used for transportation to place of removal - place of removal - FOB contract and ownership transfer at port - assessable value including freightCENVAT credit - definition of 'input service' under the CENVAT Credit Rules, 2004 - GTA service used for transportation to place of removal - place of removal - FOB contract and ownership transfer at port - Whether the respondent is entitled to CENVAT credit of service tax paid on Goods Transport Agency (GTA) services used to transport final products from factory to the port for export under an FOB sale where ownership vests up to loading into the ship. - HELD THAT: - The Tribunal held that where the respondent sold on FOB terms and recovered the FOB value from the foreign buyer, ownership of the goods vested with the respondent until the goods were loaded onto the ship. Consequently, the place of removal was the port of export and any duty liability, had it arisen, would have been calculated on an assessable value that included freight. Applying the definition of 'input service' in the CENVAT Credit Rules, 2004, the GTA services employed to transport the goods from the factory to the place of removal fall squarely within input services eligible for CENVAT credit. The Tribunal observed that this view aligns with earlier decisions of the same Tribunal (Cauvery Stones Impex (P.) Ltd. v. CCE and CCE v. Stangl Pickles & Preserves) and found no reason to depart from them. [Paras 1, 2, 3]Entitlement to CENVAT credit on the service tax paid for GTA services used to transport the final product to the port for export is upheld; the impugned order is sustained and the appeal is dismissed.Final Conclusion: The Tribunal affirmed that GTA services used to move goods from factory to the port for export under FOB terms constitute eligible input services under the CENVAT Credit Rules, 2004; the impugned order allowing CENVAT credit is sustained and the appeal dismissed. The Appellate Tribunal CESTAT, Bangalore considered whether the respondent could claim CENVAT credit for service tax paid on GTA service used for transporting goods for export. The Tribunal held that the service qualified as an 'input service' under the CENVAT Credit Rules, 2004. The decision was consistent with previous rulings, and the appeal was dismissed.