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October 2013

2013 (31) STR 370 (Tri.-Chennai) Amalgamations Repco Ltd vs. C. C. Ex, Chennai

By Puloma Dalal, Jayesh Gogri, Chartered Accountants
Reading Time 2 mins
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CENVAT credit – period prior to Notification No. 17/2009-ST dated 07-07-2009 – CHA and other services availed by manufacturer for exports – credit admissible

Facts:
The Appellant-manufacturers- availed CENVAT credit of service tax paid on CHA and other services used at ports for exporting goods, prior to the introduction of Notification No. 17/2009-ST dated 07-07-2009.

The department denied the CENVAT credit on the grounds that such services did not have any nexus with the manufacture and that the business activities sought to be included in the extended definition of input service did not include services rendered in the port area.

Held:
Considering various decisions of coordinate Benches and High Courts, the Hon. Tribunal allowed the appeal and held that it was the policy of the Government not to burden the export goods with domestic taxes and thus, the exporters were either exempted from taxes or were provided for alternative schemes of rebate/drawback of duties etc. Notification No. 17/2009–ST dated 07-07-2009 granted exemption to various taxable services provided to an exporter. Since the period involved was prior to the said notification date, the only way of following the EXIM policy and freeing export goods from domestic taxes is to allow the credit of service tax paid in respect of such consignments.

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