2024 (5) TMI 374 - AT - Service Tax

Tribunal Overturns Cenvat Credit and Service Tax Demands; JNPT Mumbai Deemed Place of Removal; Penalties Nullified.

M/s SKI Carbon Black (India) Pvt. Ltd. Versus Commissioner, CGST & Central Excise, Varanasi

M/s SKI Carbon Black (India) Pvt. Ltd. Versus Commissioner, CGST & Central Excise, Varanasi - TMI Issues involved: Admissibility of Cenvat credit on GTA service and liability of Service Tax on amounts paid to East Central Railways.Admissibility of Cenvat credit on GTA service: The appeal challenged an Order-in-Appeal regarding the admissibility of Cenvat credit on services provided by Container Corporation of India Ltd. for transporting final products. The Tribunal referred to a judgment of the Gujarat High Court, stating that services availed by the exporter until goods leave India shall be considered as used in relation to clearance of final products. Since the Appellant remained the owner of the goods until export, the place of removal was deemed to be JNPT Mumbai, not ICD Kanpur. Therefore, the Appellant rightfully availed Cenvat credit on the Service Tax paid for the transportation service. The demand for Cenvat credit, along with penalties, was set aside.Liability of Service Tax on amounts paid to East Central Railways: The case involved payments made by the Appellant to East Central Railways for the construction and maintenance of a railway crossing. The Tribunal found that the services provided by the two gatekeepers were under the control of Railways and were part of Railways' statutory function to provide safe access to the public. As such, the payment made by the Appellant did not attract any Service Tax liability, and the Appellant was not required to pay Service Tax under reverse charge mechanism. Therefore, the demand for Service Tax and penalties related to these payments were set aside.In conclusion, the appeal was allowed in favor of the Appellant with consequential relief, if any. The Order was pronounced on the 6th of May, 2024.