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PLACE OF REMOVAL UNDER CENVAT CREDIT

Service Tax - By: - Dr. Sanjiv Agarwal - Dated:- 5-6-2015 Last Replied Date:- 24-6-2015 - Place of Removal [Rule 2(qa)] Cenvat credit of input services upto the place of removal is allowed. The term place of removal was earlier not defined in Cenvat Credit Rules 2004. However, the said term was defined in section 4(3)(c) of Central Excise Act, 1944. The Hon ble Delhi CESTAT in the case of M/s Ultratech Cement Ltd. 2014 (3) TMI 159 - CESTAT NEW DELHI held that the definition of the term place of .....

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d without payment of duty; (iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory, from where such goods are removed. The definition is similar to that in Central Excise Act, 1944. The definition of place of removal is used in the definition of input service as defined under rule 2(l) of the Cenvat Credit Rules, 2004 and is effective from 11.07.2014. In Stovec Industries Ltd v. CCE, Ahmeda .....

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ake Cenvat credit on the same. [Case Maintained in CCE & C v. Stovec Industries Ltd 2013 (1) TMI 72 - GUJARAT HIGH COURT] [Case relied : CCE, Ahmedabad v. Fine Care Biosystems 2009 (7) TMI 226 - CESTAT, AHMEDABAD]. In CCE, Panchkula v. Jamuna Auto Industries Ltd 2014 (4) TMI 4 - CESTAT NEW DELHI, where assessee had taken GTA services for outward transportation of goods beyond place of removal, it was held that as freight was part of the price on which duty had been discharged, Cenvat credit .....

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f goods and as such place of removal was customer s premises and non-insurance of goods does not mean risk of loss of goods during transit not that of assessee. Accordingly, Cenvat credit of service tax paid on outward freight could not be denied and service of godown rental availed prior to removal of goods to customer s premises, held as place of removal , and for storage of raw material, therefore, Cenvat credit of godown rental was admissible. In CCE, Surat-II v. Gujarat Reclaim & Rubber .....

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) TMI 953 - CESTAT, BANGALORE], it was held that in case of export, place of removal was place of loading at port of export and, therefore, outward transportation upto that place was eligible for input service credit. In Ashirvad Pipes Pvt Ltd v. CCE, Bangalore-I 2013 (12) TMI 1268 - CESTAT BANGALORE, goods were transported from factory to port for export, while transaction of sale took place at port of shipment, it was held that port (place of export) was considered as place of removal ,which w .....

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Preserves 2011 (2) TMI 462 - CESTAT, CHENNAI] In Arvee Chem Pharma Pvt Ltd v. CCE, Mysore 2013 (12) TMI 757 - CESTAT BANGALORE, it was held that where final products are exported, place of removal was port of export, as such, courier service was qualified to be input service in terms of Rule 2(l) of Cenvat Credit Rules, 2004, hence, Cenvat credit is admissible on the same and demand and penalty imposed was to be set aside. In CCE v. Inductotherm India (P) Ltd 2014 (3) TMI 921 - GUJARAT HIGH COU .....

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be considered as place of removal for the purpose of Rule 2(l) of Cenvat Credit Rules, 2004. Thus, godowns at Agra and Farrukhabad were to be considered as place of removal for the assessee, while notwithstanding the fact that sugar was an item subjected to specific rate of duty. In Kohinoor Biscuits Products v. CCE 2014 (10) TMI 515 - ALLAHABAD HIGH COURT, assessee was a job-worker manufactured biscuits (liable to duty under section 4A) out of raw materials supplied by principal manufacturer P .....

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, Noida 2015 (6) TMI 126 - CESTAT NEW DELHI] In CCE, Raipur v. Surya Wires (P) Ltd 2015 (3) TMI 338 - CESTAT NEW DELHI, where assessee was manufacturer and availed Cenvat credit on GTA service in respect of delivery of goods with condition of FOR destination and Commissioner (Appeals) found that (a) goods were delivered at place of buyer, (b) ownership of goods was with Assessee till place of buyer, and (c) as per tenders, price was inclusive of FOR destination delivery at cost of assessee, it w .....

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04 makes it clear that outward transportation charges or taxes paid in regard thereto were claimable only with regard to transports made from one place of removal to another place of removal [ Also see : CCE & ST , Haldia v. Lumino Industries Ltd 2014 (1) TMI 1424 - CALCUTTA HIGH COURT] In PSG & Sons v. CCE, Coimbatore 2008 (5) TMI 243 - CESTAT, CHENNAI it was held that when ownership and property in goods remained with seller till delivery of goods to purchaser at his doorsteps, assesse .....

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er v. Dynamic Industries Ltd 2014 (8) TMI 713 - GUJARAT HIGH COURT, it was held that where exports were made on FOB basis, place of removal was the port and not factory gate, therefore, Service Tax paid on services availed till goods reached port, was admissible to the assessee. In Saint Gobain Glass (I) Ltd. v. Commissioner 2015 (6) TMI 125 - MADRAS HIGH COURT, it was held that clearance of final products from place of removal to customer s premises does not include outward transportation of go .....

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0 - CESTAT, BANGALORE, it was held that in case of exports, the place of removal is port where export documents are presented to customs office. [Also relied upon: Rajasthan Spinning & Weaving Mills Ltd. v. CCE, Jaipur 2007 (7) TMI 100 - CESTAT, NEW DELHI; Oriental Containers v. CCE 2012 (12) TMI 177 - CESTAT, MUMBAI]. In Rajasthan Spinning & Weaving Mills Ltd. v. CCE, Jaipur 2007 (7) TMI 100 - CESTAT, NEW DELHI;, where the assessee availed Cenvat credit from factory to port in respect o .....

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n exports as property gets transferred to buyer at port. [Also relied upon : CCE v. Adani Pharmachem 2008 (7) TMI 102 - CESTAT AHMEDABAD; Modern Petrofils v. CCE 2010 (2) TMI 328 - CESTAT, AHMEDABAD; Cauvery Stones v. CCE 2009 (11) TMI 167 - CESTAT, CHENNAI ; CCE v. Nahar Spinning Mills 2012 (7) TMI 412 - CESTAT, NEW DELHI ; CCE v. GMR Industries 2012 (8) TMI 24 - CESTAT, BANGAORE ; Agniplast P Ltd. v. CCE 2012 (9) TMI 735 - CESTAT, AHMEDABAD; Heera Overseas v. CCE 2011 (8) TMI 953 - CESTAT, BAN .....

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xports, any expenses or tax incurred till the goods reach the place of export are eligible for Cenvat Credit. In Ambuja Cements v. Union of India 2009 (2) TMI 50 - PUNJAB & HARYANA HIGH COURT , it has been held that if freight charges form part of assessable value, price is FOR destination, if ownership of goods remains with seller till delivery at customer s doorstep, transit insurance is borne by assessee and property in goods is not transferred till delivery, outward transportation is inp .....

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When the goods are removed from the factory for export purposes and the goods are destroyed due to unavoidable reasons, accident caused to the lorry, then in such a circumstances the goods are not deemed to have been removed from the factory gate in terms of Section 5 of the Central Sales Tax Act as sale has not been completed. Section 4(3)(c) of CE Act clearly explains that the place of removal is the premises from where excisable goods are to be sold after their clearance from the factory. In .....

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ns of law. Hence both the orders are set aside by allowing the appeal with consequential relief if any . In CCE, C&ST, Belgaum v. Vasavadatta Cements Ltd. 2010 (9) TMI 865 - KARNATAKA HIGH COURT, it was held that since input services was to be interpreted in light of requirement of business and it cannot be read restrictively so as to confine only upto factory or upto depot of manufacture, it would also extends to stage of handling over goods to customers for whom it was meant; therefore ass .....

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emoval' has since been defined in Rule 2(qa) of Cenvat Credit Rules, 2004 w.e.f. 11.07-2014. Wherever Cenvat Credit is available upto the place of removal, this definition of place of provision would apply, whatever be the nature of assessment of duty. The place of removal needs to be ascertained in terms of provisions of Central Excise Act, 1944 read with provisions of the Sale of Goods Act, 1930 and that payment of transport, payment of insurance etc are not the relevant considerations to .....

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lace is the place where the transfer in property of goods takes place from the seller to the buyer. This can be decided as per the provisions of the Sale of Goods Act, 1930 as held by Hon ble Tribunal in case of Associated Strips Ltd Vs Commissioner of Central Excise, New Delhi [2002 (143) ELT 131 ( Tri-Del )] . This principle was upheld by the Hon ble Supreme Court in case of M/s. Escorts JCB Limited v. CCE, New Delhi [2002 (146) E.L.T. 31 (S.C.) ] . It may be noted that there are very well lai .....

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e appellant or is it at the place of the buyer as alleged by the Revenue? In this connection it is necessary to refer to certain provisions of the Sale of Goods Act, 1930. Section 19 of the Sale of Goods Act provides that where there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred. Intention of the parties are to be ascertained with reference to the terms of the co .....

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ct, either by the seller with the assent of the buyer or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be expressed or implied and may be given either before or after the appropriation is made. Sub-section (2) of Section 23 further provides that where, in pursuance of the contract, the seller delivers the goods to the buyer or to a carrier or other bailee (whether named by the buyer or not) for the purposes of transmission to .....

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ars the risk are not the relevant considerations to ascertain the place of removal , the place where sale has taken place or when the property in goods passes from the seller to the buyer is the relevant consideration to determine the place of removal . In case of exports, it has been held in several judicial pronouncements that the place of removal is the port or the airport from where the goods are finally exported, i.e., port of export. CBEC has vide Circular No. 999/2015-CX dated 28.02.2015 .....

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Reply = Even the recent decision of the Hon'ble Supreme Court in the case of Roofit Industries Ltd., 2014(4)TMI-857 = 2015 (4) TMI 857 - SUPREME COURT also held that when the transfer of property of goods takes place at the door of customer, the cost of freight, etc. incurred therefor, will form part of the assessable value, which otherwise means that place of removal in that situation will be the customer door. - Reply By MAHESH MAIYA - The Reply = Dear Sir, Thank you very much for good art .....

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