Cenvat credit on export transport services allowed where the port of loading is treated as the place of removal.

For export goods sold on FOB basis, transportation and allied services used up to the port of loading are treated as input services because the place of removal extends to that port. On that footing, cenvat credit of service tax paid on GTA outward services for moving export consignments from the factory to the port was held admissible. The analysis followed the Board's circular on credit for transportation up to the place of sale and prior Tribunal rulings recognising export-related transport and connected services up to the port as eligible for credit. The Revenue's objection on inadmissibility therefore failed.

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Issues: Whether cenvat credit of service tax paid on GTA outward services used for transporting export goods from the factory to the port is admissible, and whether the port of loading constitutes the place of removal for such export consignments.

Analysis: The credit claim was examined in the light of the settled view that, for export goods sold on FOB basis, the place of removal extends to the port of loading. Services used to move the goods up to that point are treated as input services. The decision also followed the Board circular clarifying admissibility of credit on transportation up to the place of sale, and relied on prior Tribunal decisions holding that export-related transportation and allied services up to the port are eligible for credit.

Conclusion: Cenvat credit on GTA outward services used for export consignments was held admissible, and the Revenue's challenge failed.

Ratio Decidendi: For export goods, transportation and allied services used up to the port of loading constitute input services where the place of removal is the port, and credit of service tax paid on such services is admissible.

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