Tribunal allows Cenvat Credit for export services at gateway port

The Tribunal ruled in favor of the appellant, a manufacturer and exporter of PP sheets, allowing them to claim Cenvat Credit on services received for export under Notification No. 17/2009-ST. The appellant successfully argued that the gateway port where goods are loaded onto vessels constitutes the place of removal for export, entitling them to the credit. The Revenue's contention that the appellant was not eligible for the credit was rejected, and the Tribunal set aside the disallowance of Cenvat Credit and penalty imposition, granting the appellant consequential benefits.

---

---

Issues involved:
Whether the appellant is entitled to exemption of service tax/refund under Notification No. 17/2009-ST on services received for export of goods.

Analysis:
The issue in this appeal revolved around the eligibility of the appellant, a manufacturer and exporter of PP sheets, for exemption of service tax/refund under Notification No. 17/2009-ST on services received for export, specifically railway freight, terminal handling charges, and LDDTSC charges. The appellant had availed Cenvat Credit on these services during the period of April 2014 to July 2015. However, the Revenue contended that the appellant was not eligible for the Cenvat Credit as the services did not qualify as input services under Rule 2l() of CCR, 2004. The Revenue argued that the place of removal for export goods is where the shipping bill is filed by the manufacturer-exporter, and thus, the appellant was not entitled to the Cenvat Credit. Consequently, a show cause notice was issued, proposing disallowance of Cenvat Credit and imposition of a penalty.

The appellant contested the Revenue's interpretation of the place of removal, citing Clause C to the explanation in Section 4 of the Central Excise Act. The appellant argued that the place of removal includes any place or premises from where the excisable goods are to be sold after clearance from the factory. In the context of foreign trade, the exporter is responsible for ensuring the goods reach the gateway port, where they are loaded onto the vessel. The appellant asserted that until the goods are loaded onto the vessel at the gateway port, they incur expenses for services received, entitling them to Cenvat Credit.

After considering the arguments, the Tribunal held in favor of the appellant. The Tribunal determined that in the case of export, the gateway port constitutes the place of removal, and as such, the appellant was entitled to Cenvat Credit for the services received. Consequently, the impugned order was set aside, and the appellant was granted consequential benefits as per law.

---