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TMI Blog2013 (9) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... sed in or in relation to manufacture of their final product. The clinker manufactured at Sonadih plant is stock transferred by road to depot at Nipania railway siding from where it is transported to the appellant company's Jojobera cement factory by rail. The clinker is cleared from Sonadih plant on payment of duty. The cement manufactured at Sonadih plant is cleared on payment of duty to their cement depot from where the same is sold. The duty on cement sold from depot is paid on sale price of cement at depot. During period from April 2010 to March 2011, the appellant took Cenvat credit of service tax paid on outward transportation of - (a) cement from Sonadih factory to cement depot (Cenvat credit of Rs. 23,55,464/-); and (b) clinker fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a cement plant, it is the sister unit at Jojobera which is the place of removal, that since clinker had been cleared to Jojobera plant on stock transfer basis and as such, there was no change of ownership, the road transportation service availed for transportation from Sonadih to Nipania Depot would have to be treated as input service, that the Commissioner has wrongly treated the factory gate of the Sonadih factory as the place of removal, that in terms of definition of 'input service' in Rule 2(I) of Cenvat Credit Rules, 2004, as it stood during the period of dispute, the GTA service upto the place of removal is covered by the definition of 'input service', that even if the duty on clinker was paid at specific rate, in terms of Board's Ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jojobera plant of the appellant company, is covered by the definition of 'input service'. There is no dispute that the clearances of clinker by Sonadih plant of the appellant company to their Jojobera plant for use in the manufacture of cement were on stock transfer basis, not on sale basis. There is also no dispute that during the period of dispute, the definition of "input service" as given in Rule 2(l) of Cenvat Credit Rules, 2004, covered the outward transportation upto the "place of removal". The dispute is as to whether the factory gate of 'Sonadih plant' of the appellant company in the "place of removal", or the factory of appellant at Jojobera is the "place of removal". 7. We are of the view that the definition of "place of remova ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , only when the duty on the final product is ad valorem and not when the duty on the final product is specific or is charged on tariff value fixed under Section 3(2). Though in terms of Board's Circular No. 137/3/2006-CX., dated 2-2-2006, when the goods cleared from the factory are sold from the depot and for the purpose of determining the assessable value of the goods under Section 4, it is the depot which is the 'place of removal' and for this reason, the assessable value includes the cost of transportation of the goods from the factory gate to the Depot, the Cenvat credit of service tax paid on the transportation upto Depot would be admissible, even if the goods attract duty at a specific rate, the correctness of this circular is doubtfu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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