2019 (7) TMI 760 - AT - Service Tax

Tribunal allows Cenvat Credit for export services at gateway port

CLASSIC ENTERPRISES Versus C.G. ST C & C. E-ALWAR

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 ... Refund/Exemption of Service tax - benefit of N/N. 17/2009-ST - services received by the appellant being railway freight from ICD Tuklakabad to Gateway Port, terminal handling charges, LDDTSC charges to Container Corporation of India and Gateway Rail Freight Ltd. - place of removal - HELD THAT:- The place of removal includes any other place or premises from where the excisable goods are to be sold after the clearance from the factory. In the course of foreign trade, an exporter is entitled to payment of his goods, only on producing evidence that the goods as mentioned in the “bill of lading‟ have been loaded on the vessal. Thus, it is the primary responsibility of the manufacturer-exporter to bring the goods to the gateway port - It is only in the scheme of foreign trade, by way of facilitation that from the ICD the goods are with the custodian for transport to the Gateway port, however, the appellant as a manufacturer-exporter incurs the expenditure till the time the goods are put on the vassal at the Gateway port. The place of removal in the case of export is the gateway port, and all the expenses incurred by way of services received by the appellant, they are entitled to cenvat credit. Appeal allowed - decided in favor of appellant. 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.