Cenvat credit refund for export-linked input services upheld where services had nexus with manufacture and FOB exports.

Refund of accumulated Cenvat credit under Notification No. 05/2006-CE(NT) was considered in relation to input services used for FOB export of goods, with the relevant period extending the place of removal up to the port. Freight outward up to the place of removal, freight inward, CHA charges linked to inputs, security, building service charges and allied services were treated as having nexus with manufacture and export activity. On that basis, the refund claim was held admissible, reflecting the principle that taxes should not be exported, and the Revenue's appeal was rejected.

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Issues: Whether the respondent was entitled to refund of accumulated Cenvat credit under Notification No. 05/2006-CE(NT) dated 14/03/2006 in respect of the listed input services, on the ground that such services had no nexus with manufacture.

Analysis: The services claimed for refund were examined in the context of export of goods on FOB basis and the relevant period during which the place of removal extended up to the port. The services such as freight outward, CHA charges, security, building service charges and allied services were found to bear a nexus with the manufacturing and export activity from the place of removal. Freight outward up to the place of removal was treated as eligible, freight inward was also regarded as eligible, and CHA charges relating to inputs were held to be covered. The overall approach was also influenced by the principle that taxes should not be exported.

Conclusion: The refund claim was held to be admissible and the Revenue's appeal was rejected.

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