Rule 3 of the CENVAT Credit Rules, 2004 - CENVAT credit - Respondents were utilizing services of Customs House Agent (CHA) and surveyors at time of export of goods by treating same as input service - Respondents continued to remain owners of goods till same were exported as such place of removal in case of exported goods was port area - Whether since ownership of goods remained with respondents till port area, it could be safely concluded that all services availed by them till port area were required to be considered as input service inasmuch as same were clearly related to business activities - Held, yes - Whether, therefore, credit of duty paid on such services was admissible to respondents - Held, yes
Commissioner of Central Excise (Appeals) v. Rolex Rings (P.) Ltd. [Appeal No. E/375 & 454 of 2007]
The issue involved in the instant appeals was as to whether the respondents were entitled to avail credit of service tax paid on the services of Customs House Agent (CHA) and surveyors utilized by them at the time of export of the goods by treating the same as input service.
It was found that the CHA and surveyors’ services were utilized at the time of the export of the goods. The respondents continued to remain the owner of the goods in question till the same were exported. As such, it could be reasonably concluded that the place of removal in case of exported goods was that port area. The above interpretation was also supported by para 8.2 of the Board’s circular No. 91/8/2007-ST, dated 23-8-2007 laying down that where sale takes place at the destination point and the ownership of the goods remain with the seller till the delivery of the goods, the place of removal would get extended to the destination point and the credit of the service tax paid on the transportation up to such place of sale would be admissible. Inasmuch as in the instant case also, the ownership of the goods remained with the seller till the port area, it could be safely held that all the services availed by the exporter till the port area were required to be considered as input service inasmuch as the same were clearly related to the business activities. Activities relating to business are covered by the definition of input service and admittedly CHA and surveyors’ services are relating to the export business. As such, the reasonings adopted by the Commissioner (Appeals) that the credit of duty paid on such services was admissible to the respondents was correct. [Para 4]