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of <h1>Tribunal allows Cenvat credit for CHA service & export freight, affirming appellant's right to claim credit.</h1> <h3>M/s. Save Industry Versus CCE & ST, Coimbatore</h3> M/s. Save Industry Versus CCE & ST, Coimbatore - 2016 (45) S.T.R. 551 (Tri. - Chennai) Issues:- Availment of Cenvat credit on CHA service and outward freight paid on export clearances during 2005-06 to 2010-11.Analysis:1. The appellant, engaged in manufacturing water pumps, availed Cenvat credit on inputs and input services, including CHA service and outward freight for export clearances. A show cause notice alleged contravention of Rule 3 of CCR, 2004, based on an audit objection.2. The adjudicating authority disallowed Cenvat credit of service tax availed, imposing penalties. The Commissioner (Appeals) upheld this decision. The appellant appealed, arguing that the credit was permissible under Rule 2(l) of CCR, 2004, and citing relevant case laws.3. The appellant's counsel argued that the authorities did not consider their defenses, including revenue neutrality and bonafide belief. The Revenue's representative contended that the credit was rightly disallowed. Both sides presented their arguments.4. The main issue was whether CHA service and outward freight qualify as 'input services' eligible for Cenvat credit. The Tribunal found in favor of the appellant, citing Rule 2(l) of CCR, 2004, and previous decisions supporting the eligibility of such services for credit.5. The Tribunal clarified that Notification No. 17/2009 does not bar availing Cenvat credit, and the decision to avail exemption or credit lies with the manufacturer. The denial of input service credit by the adjudicating authority was deemed incorrect, as the appellant was entitled to take input service credit in their business activities.6. Consequently, the Tribunal set aside the impugned order, allowing the appeal with any consequential relief. The judgment emphasized that the appellant was entitled to avail input service credit for CHA service and outward freight related to export clearances.
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