Custom, Excise & Service Tax Tribunal
M/S Khanna Industrial Pipes Pvt. Ltd vs Commissioner Of Central Excise, ... on 22 March, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. IV Appeal No. E/1232/11 (Arising out of Order-in-Appeal No. SB/146/Th-I/2011 dated 13.4.2011 passed by the Commissioner of Central Excise & Service Tax (Appeals), Mumbai). For approval and signature: Honble Shri Raju, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy : Seen of the order? 4. Whether order is to be circulated to the Departmental : Yes authorities? ====================================================== M/s Khanna Industrial Pipes Pvt. Ltd. Appellant Vs. Commissioner of Central Excise, Thane-I Respondent Appearance: Shri P.V. Patankar, Advocate for Appellant Shri N.N. Prabhudesai, Supdt. (AR) for Respondent CORAM: SHRI RAJU, MEMBER (TECHNICAL) Date of Hearing: 14.03.2016 Date of Decision: 22.03.2016 ORDER NO. Per: Raju
The appellants, M/s Khanna Industrial Pipes Pvt. Ltd., are in appeal against confirmation of demand for recovery of Service Tax credit taken on Business Support Services under following headings: -
(i) Terminal Handling Charges,
(ii) Documentation Charges,
(iii) Destination Terminal Handling Charges,
(iv) Destination Documentation Charges,
(v) Destination Haulage and Shutout charges and Ground Rent availed at the port.
The reason for rejection being use of services beyond the place of removal.
2. Learned Counsel for the appellant argues that Ministry has since clarified the issue vide its Circular No. 999/6/2015-CX dated 28.2.2015 as follows: -
5.?Clearance of goods for exports from a factory can be of two types. The goods may be exported by the manufacturer directly to his foreign buyer or the goods may be cleared from the factory for export by a merchant-exporter.
6.?In the case of clearance of goods for export by manufacturer exporter, shipping bill is filed by the manufacturer exporter and goods are handed over to the shipping line. After Let Export Order is issued, it is the responsibility of the shipping line to ship the goods to the foreign buyer with the exporter having no control over the goods. In such a situation, transfer of property can be said to have taken place at the port where the shipping bill is filed by the manufacturer exporter and place of removal would be this Port/ICD/CFS. Needless to say, eligibility to CENVAT Credit shall be determined accordingly. He argued that in view of the said clarification, the grounds on which credit has been denied become irrelevant. He also argued that in respect of certain services availed at the destination beyond the Port and outside India, it was their bona fide belief that they are entitled to such services. It was argued that in absence of any mala fide intent, extended period of limitation cannot be invoked.
3. Learned AR for the Revenue relied on the Tribunals decision in the case of Excel Crop Care Ltd. 2007 (7) STR 451 (Tri-Ahmd). He also relied on the decision of the Tribunal in the case of PMP Auto Components (P) Ltd. 2012 (284) ELT 536 (Tri-Mum).
4. I have gone through the rival submissions. I find that the CBE&C, vide aforesaid Circular, has clarified that in case of manufacture-exporter the place of removal for the purpose of export would be the Port/ICD/CFS. In the instant case, the appellant is a manufacturer-exporter and has availed credit in respect of services received upto the Port of clearance and beyond that as well. So far as the services received up to the Port of clearance, which is the place of removal for the purpose of manufacturer-exporter as per CBE&C Circular, the credit of Service Tax cannot be denied. However, in respect of services availed at the destination, which is not only beyond the place of removal but also outside India, the same is not admissible.
5. In the era of self assessment, onus of taking the correct credit is on the appellant. In respect of services availed beyond the territory of India and obviously outside the place of removal, there can be no doubt regarding its inadmissibility. Availment of such credit is obviously without authority of law and mala fide. In such circumstances, extended period for the purpose of demand is correctly invoked.
6. In view of the above, the demand for recover of credit in respect of Terminal Handling Charges and Documentation charges is dropped. Rest of the demand in respect of Destination Terminal Handling Charges, Destination Documentation Charges & Destination Haulage and Shutout charges is confirmed. The penalty is also revised accordingly to the amount equal to the demand confirmed. Appeal is accordingly partly allowed.
(Pronounced in Court on 22.03.2016) (Raju) Member (Technical) Sinha 1 Appeal No. E/1232/11