In the normal course of business, Manufacturers –Exporter uses the professional and liaisoning services for obtaining export incentives and pays service tax on such services charged by the professionals. Further, in many cases these Manufacturer-Exporter files refund claim of CENVAT credit taken on such services under various incentives schemes by the government.

Now, there arises an issue whether the services taken by the manufacturer is an Input service under provisions of CENVAT Credit Rules and such manufacturer is eligible to claim the refund of such CENVAT Credit if remain unutilized?

This issue has been resolved by the Honorable CESTAT Ahmedabad in the case of Commissioner of Central Excise, Ahmedabad versus Ahmadabad Strips (P.) Ltd.- 2012 (10) TMI 878 wherein it was held that activity of obtaining export incentives is directly relatable to manufacture. Manufacturer while manufacturing goods for export and for working out the cost takes into account the export incentives. Export incentives play a very big role in the manufacture and export of goods. This being the position, service tax incurred in respect of services for obtaining export incentives can be definitely related to manufacturing activity is an input service as per Rule 2 (1) of the CENVAT Credit Rules, 2004.

Further, the Honorable CESTAT affirmed the decision of the learned Commissioner holding that respondent is eligible for the input service tax credit is to be sustained and rejected the appeal filed by the revenue with no merits.

Hence, Service Tax incurred in respect of services for obtaining export incentives can be definitely related to manufacturing activity and therefore the assessee is eligible to take the credit of input service tax paid on such professional services and consequently can claim refund.