Custom, Excise & Service Tax Tribunal
C.C.E., Raipur vs M/S. Bhilai Engineering Corporation ... on 23 July, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI 110 066.
Date of Hearing 23.07.2015
For Approval &Signature :
Honble Honble Justice G. Raghuram, President
Honble Mr. R.K. Singh, Member (Technical)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3.
Whether Lordships wish to see the fair copy of the order?
Seen
4.
Whether order is to be circulated to the Department Authorities?
Yes
Appeal No.ST/326/2009-CU[DB]
[Arising out of Order-in-Appeal No.05/RPR-II/2009, dated 18.02.2009 passed by C.C.E.(Appeals), Raipur-II]
C.C.E., Raipur Appellant
Vs.
M/s. Bhilai Engineering Corporation Ltd. Respondent
Appearance Shri M.R. Sharma, DR - for the appellant None - for the respondent CORAM: Honble Justice G. Raghuram, President Honble Mr. R.K. Singh, Member (Technical) Final Order No.52564/2015, dated 23.07.2015 Per Mr. R.K. Singh :
Revenue has filed appeal against Order-in-Appeal dated 18.02.2009 which set aside with consequential relief the Order-in-Original dated 25.08.2008 in terms of which the input service credit of Rs.54,06,266/- was disallowed and ordered to be recovered along with interest and penalties. The impugned credit was taken by the respondent on the CHA services used by them for export of their goods. The primary adjudicating authority held that such service was not eligible for CENVAT credit as it was not an input service as per rule 2 (l) of CENVAT Credit Rules, 2004 because the service was utilised after the clearance of goods from the factory gate. The Commissioner (Appeals) on the other hand relied upon the judgement of CESTAT in the case of CCE, Rajkot Vs Adani Pharmachem Pvt. Ltd. 2008 (12) STR 593 (Tribunal Ahmd)] holding that the place of removal in respect of goods exported by the respondent was the port and therefore CHA service was eligible to be called input service.
2. Revenue in its appeal has contended that (i) the CHA service was in relation to the export of goods and was availed of after clearance of the goods from the factory and therefore availment of CHA service was a post-manufacturing/clearance activity, (ii) the sale of final product for export was completed at the factory gate and therefore the factory gate was place of removal. It referred to the judgement of CESTAT in the case of Ultra Tech Cement Vs. CCE [2007 (6) STR 364 (T)] in its support.
3. None appeared on behalf of the respondent and therefore we proceed to decide the case on merits and after considering the contentions of Revenue. The definition of input service is given in rule 2 (l) of CENVAT Credit Rules, 2004 which is reproduced below:-
2(l) "input service" means any service,-
(i) used by a provider of taxable service for providing an output service; or
(ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal. The Revenue has contended that the place of removal in case of goods exported is the factory gate but has not given any basis for this assertion. The fact is that the ownership of the goods and the risks related thereto remain with the respondent at least up to the loading of the goods on the ship at the port of shipment. Section 4 of the Central Excise Act, 1944 inter alia states that the place of removal is any other place from where the excisable goods are to be sold after the clearance from the factory. Thus, the place of removal is in case of export goods in the port of shipment. The CHA services are utilised by the respondent before the goods were loaded onto the ship. The decision of Ultra Tech Cement (supra) cited by Revenue only states that prima facie there for services beyond the stage of manufacture and clearance of goods from the factory could not be input services. It is evident that CESTAT had only given a prima facie view in the case of Ultra Tech Cement (supra) and therefore the said judgement has no value as a precedent. Indeed Gujrat High Court in the case of Commissioner Vs. Dynamic Industries [2014 (307) E.L.T. 15 (Guj.)] in paragraphs 6, 7, 8 and 10 of the said judgement, while dealing with the issue of admissibility of CENVAT credit on custom house agent service, shipping agent service, container services used for export of finished goods by manufacturer thereof, in effect, held that these services were utilised for purpose of export of final products and exporters could not do business without them and hence service tax paid on these services availed till goods reached port was admissible and that the input service cannot be given restrictive meaning in view of means. and includes used in definition in Rule 2(l) of Cenvat Credit Rules, 2004.
4. In the light of the foregoing analysis, we find no merit in Revenues appeal and therefore the same is dismissed.
(Justice G. Raghuram) President (R.K. Singh) Member (Technical) SSK -4-