2010 (11) TMI 259 - AT - Service Tax

Stay order - Refund of Cenvat credit - The impugned order, held the respondents to be eligible for refund of Cenvat credit of outward GTA/CHA/Port Services in respect of their exports. - The decisions of the Tribunal in the case of Excel Crop Care Ltd. 2007 (4) TMI 15 - CESTAT, Ahmedabad , was rendered on 30th April, 2007 whereas the subsequent decisions rendered took into account the Circular issued by CBEC on 23-8-2007 wherein it was clarified that Cenvat credit in respect of services up to the place of removal would be admissible - Unable to agree with the view taken by the Revenue that just because the respondent-assessee insured their goods, the place of removal of goods becomes factory gate - Held that Revenue has not been able to make out a prima facie case in its favour and accordingly, reject the stay application.

Summary

Issues involved: Appeal against eligibility for refund of Cenvat credit for outward services in exports.

Analysis:
1. Eligibility for refund: The Revenue appealed against the Commissioner (Appeals) order granting the respondents eligibility for refund of Cenvat credit for outward GTA/CHA/Port Services in relation to their exports. The Revenue argued that the conditions prescribed were not fulfilled as the respondent had transferred the risk in the goods to the insurance company by undertaking transit insurance, which according to the Revenue, distinguished this case from previous decisions. The Revenue contended that the place of removal should be considered as the factory gate due to the insurance arrangement made by the respondent. However, the Tribunal rejected this argument, stating that the decisions in previous cases allowed Cenvat credit of service tax up to the point where the goods are loaded onto the ship when sold on FOB/CIF basis. The Tribunal emphasized that the Circular issued by CBEC clarified the admissibility of Cenvat credit in respect of services up to the place of removal, which supported the Commissioner (Appeals) decision. Consequently, the Tribunal held that the Revenue failed to establish a prima facie case in its favor, leading to the rejection of the stay application requested by the Revenue.

2. Adjournment request: The respondents requested an adjournment for the hearing due to their inability to hire a consultant. However, the Tribunal rejected this request, considering that the stay was not warranted in this case. The Tribunal proceeded to hear the case and ultimately decided against the Revenue's arguments, highlighting the importance of the Circular issued by CBEC and the interpretation of the place of removal in the context of previous Tribunal decisions.

In conclusion, the Tribunal upheld the eligibility of the respondents for refund of Cenvat credit for outward services in exports, based on the interpretation of relevant legal provisions and precedents. The decision emphasized the significance of the Circular issued by CBEC and the application of established principles in determining the admissibility of Cenvat credit in similar cases.