Whether CENVAT Credit can be claimed?

[Santosh Shetti]

Whether Manufacturer, who is under an obligation to export certain quantity of goods, as per govt. order, fullfills export obligation by availing services of Export House (*which has been allowed by govt. in given case), where Export House is procuring goods on behalf of the said Manufacturer from other manufacturer can be regarded as "input services" & can the said manufacturer claim CENVAT credit for ST paid to Export House?

[KASTURI SETHI]

Answer is "Yes". Suppose manufacturer is 'A'. Export House is 'B' and Other manufacturers are 'C'.

B is providing service to A. B is procuring goods from C on behalf of A for fulfillment of A's export obligation. Hence B is job worker of A. B's activity falls under the category of erstwhile BAS under erstwhile Section 65(105)(zzb) sub-clause (vi) of the Finance Act, 1994.(Now under 'Other Than Negative List). A has paid service tax on job work activity i.e. procurement of goods on behalf of A and this can be termed as input service and A also being a manufacturer of excisable goods can avail and utilize cenvat credit in or in relation to the manufacture of dutiable final product or providing taxable output service.

[Santosh Shetti]

Sir, Thanks a lot for the reply. Is there any direct judgment/decision of SC/HC/CESTAT on this aspect?

[KASTURI SETHI]

Sir,

I shall search and inform you soon.

[Ganeshan Kalyani]

Santoshji meanwhile you can search a citation on TMI for the issue under discussion.

[KASTURI SETHI]

Sh.Santosh Shetti Ji,

Clause (iv) to erstwhile Section 65(105)(zzb) is also very helpful on this issue. I tried my best to trace out judgement of any court but could not find so far. Only direct and clear-cut judgement, if any, will be helpful to you.

However, still my efforts are in progress.

 

[KASTURI SETHI]

Dear Santosh Shetti Ji,

I could not locate any judgement on this issue in EXCUS Electronic Library (CD). This CD does not cover all the judgements. I am not paid member of TMI. I feel handicapped without paid membership of TMI. I am not interested in subscribing two sites at a time. My subscription with EXCUS expires on 31.1.2016. Thereafter, I shall subscribe to TMI on payment. If I come across any judgement on this issue, I shall let you know.

In case you are paid member of TMI, in the meantime you may search on TMI by incorporating the words in search column, "On behalf of, job-work, provision of service on behalf of, procurement of goods on behalf of etc."

[Santosh Shetti]

Dear Sir,

Yes. I too searched in ExCus but could not find any judicial pronouncement on the issue. Same is the situation with me, I too don't have TMI subscription as of now.

But thanks a lot for your views on the issue, If I come across with some judicial pronouncement I will share it with you.

Santosh Shetti.

[Ganeshan Kalyani]

Very nice interaction and support.

AI Summary

CENVAT credit available where export house acts as job worker procuring goods on behalf, service tax claimable as input service.
The export house's procurement of goods on behalf of the manufacturer is treated as a job work/input service; service tax paid to the export house thus qualifies as an input service and the manufacturer may avail and utilize CENVAT credit in or in relation to the manufacture of dutiable final products or provision of taxable output services, subject to applicable cenvat rules. No clear judicial authority on the point was identified in the discussion.