Shri P.G. Chacko, J.
Shri M.S. Nagaraja, Advocate, for the Appellant.
Ms. Sabrina Cano, Superintendent (AR), for the Respondent.
ORDER
In this appeal filed by the assessee, the short question to be considered is whether ‘rent-a-cab’ service used by them as conveyance for their employees and ‘clearing and forwarding’ service used for transportation of goods from factory to the port for export during the period of dispute (June, 2005 to June, 2008) are covered by the definition of ‘input service’ under Rule 2(l) of the Cenvat Credit Rules, 2004.
2. After hearing both sides, I find that, in the case of Commissioner v. Stanzen Toyotetsu India (P) Ltd. - 2011 (23) S.T.R. 444 (Kar.), the Hon’ble High Court held as under :-
Rent-A-Cab Service/Transportation :
“13. Rent-a-Cab service is provided by the assessee to these workers to reach the factory premises in time which has a direct bearing on the manufacturing activity. In fact the employee is also entitled to conveyance allowance. It also would form part of a condition of service and the amounts spent on the conveyance of the employees is also a factor which will be taken into consideration by the employees in fixing the price of the final product. By no stretch of imagination can it be construed as a welfare measure. It is a basic necessity. To ensure that the work force comes on time at the work place, the employers have taken this measure which has a direct bearing on the manufacturing activity. At any rate it is an activity relating to business.”
3. Following the above decision of the Hon’ble High Court, I hold that the appellant is entitled to Cenvat credit on rent-a-cab service used for conveyance of their employees to and from factory.
4. As regards C and F service, it has been submitted by the learned counsel that it is not in dispute that the service was used for transportation of goods from factory to port and that the goods were exported. The FOB value of the goods included all the charges and expenses incurred by the appellant till the place and time of export. The ownership of the goods remained with the appellant till such time. Therefore, the port (place of export) is the “place of removal” of the goods for purposes of Rule 2(l). Accordingly, the C and F service would fall within the ambit of definition of input service. Per contra, the submission of the learned Superintendent (AR) is that sufficient documentary evidence was not produced by the appellant to show that the conditions laid down in Board’s Circular No. 97/8/2007-S.T., dated 23-8-2007 were fulfilled and, therefore, it cannot be said that the claim of the goods upto the place and time of export has been established. In this manner, it is contended that the port cannot be recognized as “place of removal”.
5. In his rejoinder, the learned counsel submits that, though it had been categorically pleaded before the adjudicating authority that the transaction of sale of the goods took place at the port of shipment as the ownership of the goods and the risk on the goods remained with the exporter until clearance of the goods from the customs frontiers, no finding was given on this aspect. It is submitted that Cenvat credit was denied on C and F services on the sole premise that the factory gate was the place of removal. In this connection, the learned counsel refers to a few decisions of this tribunal such as Commissioner v. Stangl Pickles and Preserves - 2011 (22) S.T.R. 396 (Tri.-Chennai).
6. After considering the submissions, I find that it was clearly stated by the appellant before the adjudicating authority that the transaction of sale took place at the port of shipment as the ownership of the goods and the risk on the goods rested with them only till the goods were cleared from the customs frontiers. Without even an attempt to consider the merits of this plea, the adjudicating authority proceeded to hold that the factory gate was the “place of removal” of the goods and, therefore, any service availed for outward transportation of the goods would not qualify to be input service. This view was upheld by the appellate authority also. I find that, in some of the cases cited by the learned counsel, it was held that the transfer of ownership was signified by Bill of Lading which was issued at the port of export after loading of the goods on to the ship. Para 5.5 of the Tribunal’s order in Stangl Pickles and Preserves case, for instance, is reproduced below.
5.5 In respect of the export consignments, the Bill of Lading inter alia serves as the document indicating ownership. The original authority has relied on the decision of the Hon’ble Supreme Court which held that incurring the freight and incurring charges for transit insurance could not be a sole consideration to decide the ownership or the point of the sale of the goods. In the present case, undisputedly, the ownership transfer takes place through Bill of Lading, which is issued at the port of export after loading of the goods on board the ship. Therefore, the Commissioner (Appeals) relying on the Board’s instructions extracted above cannot be held unreasonable.
7. In view of the Tribunal’s decision, the view taken by the lower authorities against the party in relation to C and F service cannot be sustained.
8. In the result, the impugned order is set aside and this appeal is allowed.
(Pronounced and dictated in open Court)
Forum 
