Fumigation of export containers is an Input Service
IT was a "small" issue before the Single Member Bench and hence the appeal itself was taken up by dispensing with the pre-deposit requirements.
CENVAT credit taken of Service Tax of Rs.54,684/- was denied to the appellant by the lower authorities. This was the credit taken by them on 'fumigation services'.
The 'small' delay of 11 days in filing the appeal was condoned by the Bench.
The 'fumigation service' was employed by the assessee, a manufacturer of steel wires, for fumigation of export containers at the time of packing in the factory premises.
The appellant submitted that they are required to do 'fumigation' as per the requirement of the international regulation for packing prepared by "International Plant Protection Convention". It is further mentioned that fumigation services incurred are in the nature of packing expenses and since packing expenses are permitted for credit of tax under the CENVAT Credit Rules, credit is allowable.
The Revenue representative submitted the usual - that as fumigation expenses are not a part of final product input Service Tax cannot be allowed.
The Bench agreed with the submission of the appellant and allowed the appeal.
DDT adds - The International Plant Protection Convention (IPPC) is an international treaty organization that aims to secure coordinated, effective action to prevent and to control the introduction and spread of pests of plants and plant products. The convention also covers research materials, biological control organisms, germplasm banks, containment facilities, food aid, emergency aid and anything else that can act as a vector for the spread of plant pests - for example, containers, packaging materials, soil, vehicles, vessels and machinery.