2013 (7) TMI 676 - AT - Central Excise

Tribunal allows CENVAT Credit for Service Tax on cargo handling services for export goods

CCE Ahmedabad Versus M/s Inductotherm (I) Pvt. Ltd.

The Tribunal upheld the Order-in-Appeal's decision to allow CENVAT Credit for Service Tax paid by cargo handling services for goods cleared for export. ... CENVAT Credit of Service Tax paid by cargo handling services (CHS) for the goods which were cleared for the purpose of export – Held that:- Relying on the decision in the case of Ultratech Cement [2010 (10) TMI 13 - BOMBAY HIGH COURT ] wherein the Hon’ble High Court of Bombay held that the assessee is entitled to avail input service credit on the services availed by them in the course of their business of manufacturing. Therefore, appellant is entitled to avail input service credit on the services in dispute – Decided against the Revenue. Issues:Denial of CENVAT Credit of Service Tax paid by the service provider under the category of Cargo Handling service.Analysis:The appeal was filed by the Revenue against the Order-in-Appeal denying CENVAT Credit of Service Tax paid by cargo handling services (CHS) for goods cleared for export. The Revenue contended that the credit was ineligible as per Rule 2(l) of CENVAT Credit Rules, 2004, arguing that services used after goods clearance are not related to manufacturing. The first appellate authority allowed the appeal based on precedents like H.E.G. Limited and Agni Plast Ltd. The main issue was the interpretation of 'place of removal' in relation to CENVAT Credit eligibility.The appellant argued that services like clearing, material handling, and bank commission post-clearance are considered input services as per judicial pronouncements like Rolex Rings and Hyundai Motors. The Division Bench in JSW Steel Ltd. held similar views. The Tribunal found that the denial of CENVAT Credit for Cargo Handling service was not justified as the services were used for clearing goods for export. The Tribunal cited its previous decision in JSW Steels Ltd. to support the appellant's position.The Tribunal noted that its previous rulings, including one involving denial of CENVAT Credit for services by a C&F agent and banking services, favored the respondent-assessee. Based on judicial precedents and the ratio in the assessee's own case, the Tribunal concluded that the impugned order was legally sound and rejected the Revenue's appeal. The judgment highlighted the importance of interpreting CENVAT Credit rules in line with established legal principles and precedents to ensure fair treatment of taxpayers.