2020 (4) TMI 6 - AT - Service Tax

Credit allowed for container cleaning & pest control services; disallowed for GTA errors.

M/s. Ballavpur Paper Manufacturing Limited Versus Commissioner of CGST & CX, Bolpur Commissionerate

M/s. Ballavpur Paper Manufacturing Limited Versus Commissioner of CGST & CX, Bolpur Commissionerate - TMI Issues involved:1. Credit eligibility for container cleaning and washing of unloaded containers.2. Credit eligibility for pest control service.3. Disallowance of credit for GTA services.4. Credit availed on documents not in the name of the appellant.5. Payment of service tax on bank charges.6. Input service used after clearing final products.7. Service tax on port/logistics services and porter & coolie charges.Issue 1: Container Cleaning and Washing of Unloaded ContainersThe appellant argued that charges related to container cleaning and washing were mandatory logistic expenses incurred before returning containers to shipping lines, thus forming part of the landed cost of imported material and falling under input services. The Tribunal found merit in this argument, considering the charges directly related to the imported consignments loaded in containers. Therefore, credit for these services was held to be eligible.Issue 2: Pest Control ServiceThe appellant contended that pest control services were essential to protect raw materials, finished goods, and workers' health, directly or indirectly related to manufacturing and business activities. The Tribunal agreed with this assertion, deeming the services eligible for credit as they were deemed necessary for the manufacturing process and worker safety.Issue 3: Disallowance of Credit for GTA ServicesWhile the adjudicating authority acknowledged the payment of tax on GTA services, they disallowed the credit due to procedural infractions regarding the payment of service tax directly to the government exchequer. The Tribunal disagreed with this decision, stating that as long as there was no loss of revenue and the service tax was paid, the appellant should not be denied Cenvat credit for procedural errors.Issue 4: Credit Availed on Documents Not in the Name of the AppellantThe appellant did not contest the issue of credit availed on documents not in their name. Therefore, the Tribunal upheld the decision on this matter without further elaboration.Issue 5: Payment of Service Tax on Bank ChargesThe appellant claimed credit for service tax on bank charges based on self-prepared documents showing the tax as inclusive. However, since the credit was based on self-prepared documents and not official records, the Tribunal upheld the disallowance of credit in this regard.Issue 6: Input Service Used After Clearing Final ProductsThe appellant did not contest the issue of input service usage after clearing final products. Consequently, the Tribunal upheld the decision on this matter without additional discussion.Issue 7: Service Tax on Port/Logistics Services and Porter & Coolie ChargesThe appellant argued that service tax paid on porter and coolie charges for transporting input materials, as well as on port/logistics services, should be eligible for Cenvat credit. The Tribunal agreed with this argument, stating that the credit for service tax on these charges related to input materials was permissible.In conclusion, the Tribunal set aside the impugned order regarding the first two issues, allowed credit for service tax on port/logistics services and porter & coolie charges, and upheld the decision on the remaining issues. The appeal was partially allowed in accordance with the Tribunal's findings.