CX - It is avowed principle of GOI that exports should not be taxed and, therefore, if credit of service tax paid on fumigation services is not allowed, that would add to cost of goods exported: CESTAT
By TIOL News Service
MUMBAI, JUNE 01, 2016: THE issue involved is regarding the Cenvat Credit availed of the service tax paid on the fumigation services. These services were used for fumigating containers in which export goods were dispatched.
It is the case of the revenue that the service is not used in or in relation to the manufacture of the final product and hence the credit should be denied.
The appellant is before the CESTAT and brings to the notice of the Bench an identical issue decided in their own case by final order dated 28.12.2012 - 2013-TIOL-624-CESTAT-MUM wherein the bench held that the fumigation services are expenses incurred in nature of packing expenses for the export of goods and allowed credit.
The AR stressed upon the fact that the appellant had not produced any evidence/literature to indicate that fumigation is required to be done; that there is no nexus with the fumigation services and goods manufactured and cleared.
The Bench observed -
"5. On considering the contention of both sides, I find that there is no dispute as to the fact that fumigation services are utilised by the appellant for fumigating containers in which goods were exported. On perusal of the judgment of the Tribunal in appellant's own case, I find that the issue is very same. Accordingly, following the same judgment, I find the impugned order is unsustainable and liable to be set aside.
6. As regards the argument advanced by the ld. Departmental Representative in my view they do not carry the case of the revenue any further as it is avowed, principles of Government of India, that exports should not be taxed and if credit of service tax paid on fumigation services is not allowed, that would add to the cost of the goods exported."
The impugned order was set aside and the appeal was allowed.
(See 2016-TIOL-1297-CESTAT-MUM)
|