The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) observed that the ‘place of removal’ in this case is the port of loading and all services availed up to the port of loading qualify as ‘input services’ and upheld the Eligibility to Avail Cenvat Credit of Wharfage Landing Charges paid by Indian Oil Corporation for Using Jetties/berths of Port Authorities.
The appellant revenue challenged the impugned Order-in-Original passed by Commissioner of Central Excise, Haldia, wherein he has dropped the Proceedings initiated against the Respondent M/s. Indian Oil Corporation (Refinery Division).
The Respondent has availed Cenvat credit of ‘Wharfage landing charges’ paid by them for using the jetties/berths of the Port Authorities in Haldia and other ports for loading and unloading of their finished goods manufactured in their other refineries for trading purposes.
The Service Tax credit was distributed to them by their Input Service Distributors registered at Kolkata, Odisha and Hyderabad. The department contended that the Respondent was not eligible for the credit as the ‘Wharfage service’ was provided beyond the place of removal.
Two Show Cause Notices were issued to the Respondent proposing to deny the credit and they were adjudicated by Commissioner of Central Excise, Haldia, who allowed the Cenvat credit totally amounting to Rs.8,05,93,828/- and dropped the proceedings initiated against the Respondent in the said Notices.
The Commissioner relied on the Board Circular No.97/8/2007 – ST dated 23.08.2007 and observed that the ‘place of removal’ in this case is the port of loading and all services availed up to the port of loading qualify as ‘input services’ and accordingly, allowed the credit.
The issue to be decided in the present appeal is whether the Respondent is eligible to avail of the service tax credit passed on by the ISD.
A two-member bench comprising Shri R Muralidhar, Member(Judicial) and Shri K Anpazhakan, Member(Technical) observed that “the eligibility of credit has not been questioned when the ISD availed the credit. They have distributed the credit as per the procedure prescribed. The ISD passed on the credit to the Respondent as per the ratio of its turnover. The ISD only indicated the amount of credit distributed. It does not mention that the credit pertains to ‘wharfage service’ or any other particular input service. If there is any objection regarding the eligibility of the credit, then it must be raised with ISD who availed and passed on the credit. Thus, we observe that the adjudicating authority has rightly followed the decision of the Tribunal, Ahmedabad in the case of Godfrey Philips India Ltd. Vs Commissioner Service Tax, Ahmedabad and allowed the credit and we do not find any infirmity in the impugned order.” The CESTAT upheld the impugned order and rejected the appeal filed by the department.
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