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of <h1>Clarification on Service Tax Credit Eligibility for Export Goods Transportation</h1> <h3>RAJASTHAN SPG. & WVG. MILLS LTD. Versus COMMISSIONER OF C. EX., JAIPUR</h3> The judgment clarified the admissibility of service tax credit on freight for outward transportation of goods to the port on FOR basis, emphasizing the ... Appellant contended that Cenvat credit of service tax paid on freight regarding outward transportation of goods from the factory premises to the place of port on FOR basis admissible – Pre-deposit of service tax and penalty waived and recovery thereof stayed Issues involved:1. Admissibility of credit of service tax paid on freight for outward transportation of goods from factory premises to port on FOR basis.2. Determination of the 'place of removal' for export goods in relation to service tax credit eligibility.Analysis:1. The issue in this case revolves around the admissibility of service tax credit on freight for outward transportation of goods to the port on FOR basis. The appellant argued that credit should be allowed up to the port as the goods were exported. Reference was made to a Tribunal decision in Gujarat Ambuja Cements Ltd. v. CCE, Ludhiana, which stated that the consignor cannot take credit beyond the place of removal. The lower authorities considered the 'place of removal' to be at the factory gate. The appellant relied on a Draft Circular of the Board and a decision in the case of M/s. Kuntal Granifes Ltd. v. CCE, Bangalore. The issue was whether the credit should be allowed up to the port for export goods.2. The discussion on the determination of the 'place of removal' for export goods was crucial in this case. The Draft Circular of the Board stated that the place of removal is the delivery of goods at the destination as per the contract. The Tribunal decision in M/s. Kuntal Granifes Ltd. highlighted that the place of removal for export goods is when the export documents are presented to the Customs office at the port. It was emphasized that in cases where goods are destroyed before reaching the port, they are not deemed to have been removed from the factory gate. The Tribunal held that in the present case, the appellant availed credit of service tax paid on freight up to the port, making a prima facie case for waiver of pre-deposit of duty and penalty until the appeal's disposal.In conclusion, the judgment clarified the admissibility of service tax credit on freight for outward transportation of goods to the port on FOR basis, emphasizing the determination of the 'place of removal' for export goods in relation to service tax credit eligibility. The decision highlighted the importance of presenting export documents to the Customs office at the port to establish the place of removal for export goods, ultimately leading to the waiver of pre-deposit of duty and penalty for the appellant until the appeal's final disposal.
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