By TIOL News Service

MUMBAI, APRIL 22, 2016 : THE CENVAT credit of Service Tax paid on the following Business Support Services viz. Terminal Handling Charges,Documentation Charges, Destination Terminal Handling Charges,Destination Documentation Charges,Destination Haulage and Shutout charges and Ground Rent availed at the Port was denied on the ground that these were services used beyond the place of removal.

Before the CESTAT, the appellant placed reliance on the Board Circular No. 999/6/2015-CX dated 28.2.2015 in support of their stand of taking credit. It is also submitted 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 also argued that in absence of any mala fide intent extended period of limitation is not invocable.

The AR reiterated the order of the lower authority and derived support from the decisions in Excel Crop Care Ltd. - 2007-TIOL-701-CESTAT-AHM & PMP Auto Components (P) Ltd. - 2012-TIOL-719-CESTAT-MUM.

The Bench observed -

On Merits:

++ 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 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.

Limitation:

The demand for recovery 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.

The Appeal was partly allowed.

(See 2016-TIOL-961-CESTAT-MUM)