Per Dr. Chittaranjan Satapathy, J.

1. Heard both sides.

2. We find that the issue involved in this case is as to whether service tax paid on CHA services in respect of export of goods can be allowed as credit or not. The issue stands decided by the Tribunals Final Order No. 1193 to 1209/2011 dated 28.10.2011 in the case of M/s. Amalgamations Repco Ltd. & 14 Ors. Vs. CCE, Madurai & Trichy. The gist of the said order is reproduced below for ready reference:-

3. As seen from above, there are some decisions which do not allow credit of service tax paid on CHA services holding that the services availed in the port area are not input services for the manufacture of goods. The departmental representatives appearing in different cases have placed reliance on these decisions which are mentioned above at Sl. No. (1) & (2) in paragraph 2 above, whereas reliance is placed by learned counsels appearing for the assessee-appellants/ respondents on other decisions listed above which allow credit of service tax paid on CHA and other services for various reasons. Some of the orders hold that these services are related to business activities of the assessees. Some of the other orders are passed on concession and/or non-challenge to such credit being allowed earlier. The last decision cited at Sl. No. (12) in paragraph 2 above places reliance on Honble Karnataka High Courts decision in the case of ABB Ltd. (cited supra). However, it is seen that the Honble Karnataka High Court decided the issue in respect of transport services placing reliance on the specific phrase relating to such service in the definition of input service and said nothing about other services like CHA service. Some of the decisions have construed place of removal to be the point of export. However, it is a fact that the place of removal is the factory gate and the port area is the place where the goods have been delivered for export. The place of delivery cannot be the place of removal. Similarly, the ownership of the goods under export depends on the type of contract between the buyer and the seller. As is well known, the 13 INCOTERMS are used for specifying the terms of contract beginning from EXW to DDP with 11 other INCOTERMS in between. EXW indicates that the buyer has to lift the goods delivered to him at the place of manufacturing whereas DDP indicates that the seller has to deliver the goods at the buyers premises after customs clearance and payment of duty. In the international trade, the buyer and seller are free to chose any term of sale by mutual agreement and that cannot determine whether a particular service availed by the seller is an input service are not.

4. It was pointed out by the Tribunal in the case of Kbace Tech P. Ltd. Vs. CCE & ST, Bangalore 2010 (18) STR 281 (Tri. Bang.) that the legal provision under Section 37(2) (xviaa) enabled making rules for provision of credit of service tax paid or payable on taxable services used in or in relation to the manufacture of excisable goods, whereas the definition of input service under the CENVAT Credit Rules, 2004 was different and that there is lack of harmonization between the expressions used in the Act and the Rules. The two decisions at Sl. No. (1) and (2) in paragraph 2 above appear to be quite legal in terms of what Section 37(2) of the Act allows the rule makers to provide for. CHA services have been held under the said two decisions not to be relatable to manufacture of the goods. Some of the other decisions are apparently based on the definition of input service found in the rules, which as mentioned above, are not harmonized with the Act. These decisions are not well founded as they are based on premises like place of removal being stretched to cover the actual place of delivery i.e. the port area, and the activities relating to business being stretched to cover activities like CHA service which takes place much after the manufacturing activity is over and in the course of despatch of the goods in the course of export. However, I am of the considered view that for the reasons stated below, it is not necessary to deal in detail with these decisions cited by both sides.

5. It is the undisputed policy of the Government not to burden the export goods with domestic taxes as has been noted in various decisions of the Tribunal. The reasons are obvious. We do not want to make domestically produced goods, when exported to the foreign market, to become uncompetitive. Secondly, no country wants to export the domestic taxes meant to be levied on domestic consumption of goods and services. Each country either exempts such taxes in respect of export goods, including taxes relating to inputs used in the export goods, or there are alternative schemes for providing rebate, drawback of duties suffered by export goods. India is no exception as we also have similar schemes. There are also schemes making available duty-free goods and services for export production.

6. As noted by the Honble Karnataka High Court in the case of Konkan Marine Agencies (cited supra) definition of cargo handling service itself puts a bar with regard to imposition of service tax in respect of service relating export cargo. Though it was pleaded on behalf of the Department in that case that there is no such exemption under the category of Port Services, the Honble High Court approved the decision of the Tribunal not to levy service tax in a case where export cargo was involved. It would perhaps be a better idea to provide similar exclusion as in the case of cargo handling service to exclude all services from the ambit of taxation when the same relate to export of goods. I find that the Government under Notification No. 17/2009-ST dated 7.7.2009 has since granted exemption to various taxable services provided to an exporter. CHA services are also exempted under Sl. No. 11 to the Table annexed to the said Notification. The present cases have arisen apparently in the absence of exemption notification for the previous period. The only way freeing export goods from domestic taxes can be ensured for the period relevant to these appeals is to allow credit of the service tax paid on the CHA and other services in respect of the export consignments so that the exporter would be compensated either by utilization of such credit for payment of other taxes or by taking refund when such utilization is not possible. Accordingly, the impugned orders allowing such credit in respect of cases where the Department is in appeal are upheld and consequently, the departmental appeals are dismissed. In respect of one appeal filed by the assessee-appellant where the credit has been denied, the impugned order is set aside and the appeal is allowed holding that the credit is admissible.

7. Following the ratio of the aforecited decision of the Tribunal, we set aside the impugned order and allow the present appeal also. The stay petition also stands disposed of accordingly.