Manikgarh Cement v. CCE

CENVAT CREDIT RULES, 2004

--Cenvat credit--Clearing and Forwarding Agency serviceWhether assessee was a recipient of service----Where assessee had claimed input credit in relation to services availed of a clearing and forwarding agent to facilitate transportation to buyer, the credit was rightly denied by revenue because even though the billing transaction was routed through the assessee, the actual recipient of such services was the buyer of goods and not the assessee. --Assessee was engaged in the manufacture of cement. It sold the cement as ex-factory sale and the Clearing & Forwarding Agent cleared finished goods from the railway and the goods were handed over to the Transport for onward dispatch to the buyer. It availed Cenvat credit in respect of service tax paid by Clearing and Forwarding agent. Revenue took the view that Clearing and Forwarding Agency services was not received by the assessee, whereas same was rendered to the buyer directly, therefore it was not input service for the assessee, thus, credit was not admissible. Assessee contended that C & F agent service was in relation to overall business activity of the assessee, therefore, it was input service and the credit was admissible Held: Merely because assessee had arranged Clearing and Forwarding service through C & F agency and billing was made by Clearing and Forwarding agency to the assessee did not mean that the assessee was a recipient of the service, therefore, Cenvat credit was not admissible to the assessee in respect of clearing and forwarding charges.