Cenvat credit on export clearance services and laboratory analysis charges allowed where services were linked to exports and manufacture.

Cenvat credit was held admissible on Service Tax paid for CHA and C&F services used in relation to export goods because, in export transactions, the place of removal is the port and the export-clearance services are connected with export of goods. Credit was also allowed on laboratory analysis charges because the water analysis related to water used in the manufacturing process and was therefore linked to manufacture. The appellant was entitled to credit on both sets of services.

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Issues: Whether Cenvat credit was admissible on Service Tax paid on CHA and C&F services for export goods and on laboratory analysis charges relating to water used in manufacture.

Analysis: The credit on CHA and C&F services was denied by the lower authorities on the footing that the services were rendered after clearance of goods from the factory. The appellate authority held that, in the case of exports, the place of removal is the port and the services used for export clearance are connected with the export of goods. As regards laboratory analysis charges, the authority found that the water analysis was incurred for water used in the manufacturing process and was therefore related to manufacture.

Conclusion: The appellant was entitled to Cenvat credit on the CHA and C&F services as well as on the laboratory analysis charges.

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