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2020 (10) TMI 438 - AT - Central ExciseCENVAT Credit - input services or not - appellant availed various services at Kandla Port as that of C&F, Testing, Sampling, etc. as were necessary in relation to the export of goods - rejection on the ground that the services which are availed only upto the place of removal are input services eligble to credit - contravention of the provisions of Rule 3 & 4 of Cenvat Credit Rules 2004 - period January 2008 to September 2008 - HELD THAT:- The availability of cenvat credit to the manufacture of goods floats from rule 3 (1)(2) of CCR Rules which provides that the manufacturer or producer of final product or provider of taxable service shall be allowed to take credit of any input service received by the manufacturer of final product or by the provider of output service. This rule clarifies that to avail Cevnat Credit the services received by the manufacturer or by service provider should be such as may be covered under the definition of input service - It is relevant to point here that the original definition of input services used the expression “from the place of removal”. It is w.e.f. 1.4.2008 that, the word “from” stands replaced by the word “upto”. Thus it is only upto the place of removal that the input services availed are eligible for Cenvat Credit. This amendment no doubt had changed the entire scenario as the benefit which was earlier admissible even beyond the place of removal now gets terminated at the place of removal and the availability of Cenvat Credit of input tax paid gets closed at that place. Whether the services availed by a manufacturer at the port are the services availed by him upto the place of removal i.e. as to whether “at the port” is included in “upto the port”? - HELD THAT:- The definition of Place of Removal makes it abundantly clear that the place where sale takes place or from where the property in goods passes from the seller to the buyer is called the place of removal. Though this definition is not specific for the exports but the above interpretation is clearly applicable to exports as well. Applying the same it becomes clear that in case of export of goods the property in goods passes from manufacturer to the buyer only after shipping bill is filed by the manufacturer, either by himself or through is representative, and there is a LeT export order issued. Since both these activities happen only at the port i.e. inside the port and not at the gate of the port, the port as such gets included in the word “upto”. To technically clarify the silence in the provision about exports, the Board has also issued a circular no. 999/6/2015-CX dated 28.2.2015. The circular clarified that in case of exports for the purpose of Cenvat Credit of input services the place of removal is the port or the airport from where the goods are finally exported. Handing over of the goods to the carrier /transporter for the further delivery of the goods to the buyer with the seller not reserving the right of the disposal of the goods, would lead to passing of property from the seller to the buyer. As per the definition of place of removal as mentioned above, it generally happens at the factory gate or the warehouse or the depot of the manufacturer, hence any service availed by the manufacturer beyond this point will not be eligible for cenvat credit on input tax paid by him. In the present case, the property in the goods passed from the appellant to his buyer only at the port where they have obtained the Let export order and the services in question are such as were availed by the manufacturer prior getting the said order. Hence, the said services as that of CHA, CNF, testing and sampling etc. are eligible to be classified as the input services Resultantly the appellant is entitled to avail the cenvat credit for the tax paid on such input services. The observation of learned commissioner in para 8 of the order and the examples cited therein are therefore, held to be not applicable to the given facts, and circumstances. The findings are therefore held to be false. These are rather observed to be mere literature or language oriented than being technical in nature. The findings with respect to the period from April 2008 to September 2008 are therefore set aside. Appeal allowed - decided in favor of appellant.
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