TMI Blog2014 (3) TMI 921X X X X Extracts X X X X X X X X Extracts X X X X ..... essentially for purpose of exporting goods, then, place of removal shall have to be essentially ' port' from where goods are actually taken out of country and, accordingly, said services (including transportation of finished goods upto such place of removal being port) would be input service - Therefore, in case of export of final product, place of removal would be port of shipment and not factory gate and therefore, manufacturer would be entitled to credit of input services availed upto such ' port of shipment'. Though there is no express inclusion of cargo handling service in definition of input service; however, in light of precedents, it can be held that in case of export of final product, place of removal would be port of shipment and not factory gate and therefore, manufacturer would be entitled to avail amount claimed towards cargo handling as input service under Cenvat Credit Rules - Since, in this case, cargo handling services were utilized for purpose of export of final product, said services availed upto place of removal being port of export (i.e., until goods leave India from port) were service used in relation to clearance of final products upto place of removal - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of penalty under rule 15(2) of the Credit Rules read with section 11AC of the Act. 6. By the order in original, the department rejected the claim of the assessee wherein the Additional Commissioner, Central Excise, Ahmedabad upheld the demand of total amount of Rs.10,32,141/- under rule 14 read with proviso to sub-section (1) of section 11A of the Act. He also imposed penalty and ordered recovery of interest as well. 7. This was challenged by way of appeal before the Commissioner (Appeals) who negated the version of the department by an elaborate discussion of both the provisions as well as of the decided case laws. It also did not permit the extended period of limitation on the ground that the details were provided by the assessee time and again and if there was any objection on the part of the department, it could have brought to the notice of the assessee. Thus in absence of any suppression on the part of the assessee, the extended period was not permitted to be invoked. 8. Aggrieved by the said order, the Department challenged the same before CESTAT which also concurred with the findings of the Commissioner (Appeals) and upheld the claim of the assessee negating the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal products and clearance of final products upto the pace of removal, and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal.' 'Place of removal' as defined under clause (c) of sub-section (3) of section 4 of the Central Excise Act, 1944 needs reproduction: Place of removal' means (i) a factory or any other place or premises of production or manufacture of the excisable goods, (ii) a warehouse or any other place on premises wherein the excisable goods have been permitted to be deposited without payment of duty, (iii) a depot, premises of a consignment agent or any other place or premises from where the excisable good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e used by the manufacturer for clearance of final products from the place of removal. 13. While considering the question as to whether goods transport agency used for transportation of finished goods from place of removal upto the premises of the purchaser, whether can be said to be a service directly or indirectly in or in relation to manufacture of final product or clearance of final product from the place of removal, it was observed as under: 19. When we hold that outward transportation would be an input service as covered in the expression 'means' part of the definition, it would be difficult to exclude such service on the basis of any interpretation that may be offered of the later portion of the definition which is couched in the expression 'includes'. As already observed, it is held in several decisions that the expression 'includes' cannot be used to oust any activity from the main body of the definition if it is otherwise covered by the expression 'means'. In other words, the expression 'includes' followed by 'means' in any definition is generally understood to be expanding the definition of the term to make it e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to any other place, such as godown, warehouse etc. from where it would be ultimately removed, such service is covered in the expression 'outward transportation up to the place of removal since such place other than factory gate would be the place of removal. We do appreciate that this could be one of the areas of the application of the expression 'outward transportation upto the place of removal'. We are unable to see whether this could be the sole reason for using such expression by the Legislature. 22. Be that as it may, we are of the opinion that the outward transport service used by the manufactures for transportation of finished goods from the place of removal upto the premises of the purchaser is covered within the definition of input service provided in rule 2(l) of the Cenvat Credit Rules, 2004. 14. This Court in Tax Appeal Nos.353 of 2010 and Tax Appeal No.204 of 2011 decided on 18th October 2012 and 7th November 2012, in the case of Commissioner of Central Excise, Ahmedabad-II v. M/s.Cadila Healthcare Ltd. had dealt with similar question in respect of various services which also included clearing and forwarding agent, courier service, etc. for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services of the description falling in sub clause (i) and (ii). Rule 2(l) then provides an inclusive definition by enumerating certain specified services. Among those services are services pertaining to the procurement of inputs and inward transportation of inputs. The Tribunal, proceeded to interpret the inclusive part of the definition and held that the legislature restricted the benefit of CENVAT credit for input services used in respect of inputs only to these two categories viz. for the procurement of inputs and for the inward transportation of inputs. This interpretation which has been placed by the Tribunal is ex facie contrary to the provisions contained in Rule 2(l). The first part of Rule 2(l) inter alia covers any services used by the manufacturer directly or indirectly, in or in relation to the manufacture of final products. The inclusive part of the definition enumerates certain specified categories of services. However, it would be farfetched to interpret Rule 2(l) to mean that only two categories of services in relation to inputs viz. for the procurement of inputs and for the inward transportation of inputs were intended to be brought within the purview of Rule 2(l). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fall in the substantial part, but also covers services, which are covered under the inclusive part of the definition.' 18. In the case of Meghachem Industries v. CCE [2009] 23 STT 472 (Ahd.-CESTAT) the Tribunal, Ahmedabad was dealing with the Customs House Agent service received by the exporter where goods were exported on FOB basis. The Tribunal held that the place of removal is to be taken as port. While doing so, it relied on the decisions in the case of Ultratech Cements Ltd. (supra) and in the case of CCE v. Adani Pharmachem (P.) Ltd. [2009] 19 STT 239 (Ahd.-CESTAT) 19. The Delhi Tribunal in the case of CCE v. H.E.G. Ltd. [2010] 28 STT 277 (New Delhi-CESTAT), was dealing with inputs of cargo handling service and technical testing analysis service. Relying on a Larger Bench decision of the Tribunal in the case of ABB Ltd. v. CCE ST [2009] 21 STT 77 (Bang.-CESTAT), it held that cargo handling service was considered as inclusive in the definition of 'input service' and this service even though rendered on clearance of final products from the place of removal, service tax paid on such service was eligible for availing the credit. The Tribunal was of the opinio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oducts upto the place of removal. If at this stage, the definition of input service is recollected, it includes services used by the manufacturer directly or indirectly in or in relation to manufacture of the final product and in relation to clearance of final product from the place of removal. Definition of term 'input service' being very wide in its expression, wherein number of services used by manufacturer are included in the same, used directly or indirectly. 24. This Court in the case of Parth PolyWooven (P.) Ltd. (supra) has held that when the manufacturer transports his finished goods from the factory, without clearance to any other place such as, go-down, warehouse, etc. from where it would be ultimately removed, such service is covered in the expression outward transportation up to the place of removal since such place other than factory gate would be the place of removal. It had been in clear terms held that outward transport service used by the manufacturer for transportation of finished goods from the place of removal up to the premises of the purchaser is covered within the definition of 'input service' provided in rule 2(l) of the Cenvat Credit R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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