Case Law Details
Eaton Industrial System Pvt. Ltd. Vs CCE & ST (CESTAT Mumbai)
CESTAT Mumbai has held that Cenvat credit can be availed on foreign warehouse services received by a company in India for which service tax was paid under reverse charge mechanism. It was held that denial of credit would amount to double taxation.
FULL TEXT OF THE CESTAT JUDGEMENT
Inadmissibility of CENVAT credit availed against “Business Support Services” by the appellant towards warehousing and logistics support services taken in Spain for timely delivery of goods to its customer M/s Ford Expana S.L., Spain is assailed in these appeals.
2. Brief facts of the appellant’s case, as revealed from the appeal memo and synopsis submitted by it is that it is engaged in manufacture of engine valves and supply the said valves to M/s Ford Expana S.L. in Spain. As per agreement and to ensure just-in-time policy of its customer, it has taken warehousing and allied services in Spain. It exports manufactured goods which are stored in warehouse provided to the appellant by one Espack in Spain. The appellant bears the risk of loss or damage to the goods during the transit to the warehouse and the ownership of the goods remains with the appellant till those are delivered to M/s Ford Expana S.L. The appellant paid Service Tax under “Reverse Charge Mechanism” on the aforesaid services under the category of “Business Support Services” and availed CENVAT credit of the Service Tax so paid on the aforesaid services provided by Expack and another company Integrale. The respondent-department scrutinised the appellant’s records and observed those credits are inadmissible CENVAT credit holding the services availed by it are received beyond the place of removal i.e. after the clearance have been effected. It was put to show-cause, the matter was adjudicated upon, duty demand for the period from May, 2014 to February, 2015 was confirmed along with interest and penalty. Appeal No. E/86474/2018 was preferred. For the subsequent period from March, 2015 to December, 2015 another show-cause was issued, adjudicated upon and demand was confirmed. Against both the Orders-in-Original, appeals were preferred before the Commissioner of GST & Central Excise (Appeals), Nashik who confirmed both the Orders-in-Original thought a common order. Appeal No. E/86475/20 18 is preferred against the subsequent period referred above.
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