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2016 (1) TMI 519 - CESTAT CHENNAI

2016 (1) TMI 519 - CESTAT CHENNAI - TMI - Cenvat Credit - service tax paid on outward transportation of finished goods, up to the port, which are meant for export - place of removal - The CHA charges and wharfing charges rendered by the service providers outside the factory, after the clearance of goods from the factory, was also sought to be considered as ineligible input services” as these services can neither be considered as used in or in relation to manufacture of cars.

Held that .....

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goods to be exported including taxes relating to inputs used in the export goods, or there are alternative schemes for providing rebate, drawback of duties suffered by export goods. India is no exception as we also have similar schemes. There are also schemes making available duty-free goods and services for export production. In the event of the benefit of cenvat credit being denied, it would contribute to inescapable rise in costs, making exports uncompetitive in the global market.

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the place of removal is the Port, we hold that the appellants are eligible for cenvat credit on GTA, CHA and wharfage charges. - Credit allowed. - Decided in favor of assessee. - Appeal No. E/Misc/42432/2014 & E/793/2007 - Final Order No. 41797 / 2015 - Dated:- 7-10-2015 - Shri R. Periasami, Technical Member And Shri P.K. Choudhary, Judicial Member For the Petitioner : Shri. S. Muthuvenkataraman , Advocate For the Respondent : Ms. Indira Sisupal , AC (AR) ORDER Per P. K. Choudhary This appeal is .....

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The CHA charges and wharfing charges rendered by the service providers outside the factory, after the clearance of goods from the factory, was also sought to be considered as ineligible input services as these services can neither be considered as used in or in relation to manufacture of cars. 2. The Ld. Counsel Sri. S.Muthu Venkataraman, Advocate appearing on behalf of the appellant company contended, interalia, that they paid the freight up to the port and availed credit in respect of the same .....

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al also includes port as the provisions of clause (iii) of section 4(3)(C) reading as any other place or premises where excisable goods are to be sold after their clearance from the factory from where such goods are removed; that any other place or premises, other than a factory / depot from where the goods are ordinarily kept at a place temporarily to be sold at a later date would fall within the ambit of the definition place of removal and thus the intention of the legislature is to include al .....

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idered as sale and the sale is said to have been concluded and recognized only when the same is loaded into the vessel and bill of lading is received until which time, appellant continues to be responsible for the cars lying in the port and are treated as stock in trade in the books of account as the risk and rewards are envisaged under the sale of goods Act, is not passed on to the buyer as the contract with the foreign buyer is on FOB, CFR and/or CIF basis; that it is well laid out that if the .....

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is very settled legal position that the post sale transportation of manufactured goods is not an input in the manufacture. The Adjudicating Authority has relied upon certain decisions to deny the cenvat credit on such services on the above grounds and had confirmed the impugned demand and imposed a penalty of ₹ 1,00,000/- under Rule 15 of the Cenvat Credit Rules, 2004. 4. We find that, the issues to be decided in this are as under:- a. Whether the service tax paid on the cost of transport .....

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e Ministry of Finance/ CBEC through the Circular No.999/6/2015-Cx dated 28.2.2015 which is binding on the department. In this context, we would refer to the definition of input services as it existed during the period in question which reads as follows : Input services means any service (i) used by a provider of taxable service for providing an output service; or (ii) used by the manufacturer, whether directly or indirectly , in or in relation to the manufacture of final products and clearance .....

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, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation up to the place of removal It may be seen from the above definition that the cenvat credit is admissible not only when input services are used by the manufacturer whether directly or indirectly in relation to manufacture of the final products and it also covers input services used by the manufacture for clearance of final products from the place of removal. The input service .....

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transportation of goods up to the place of removal. 6. Now the question is, whether in the facts of this case, the Commissioner is right in holding that the port is not at all the place of removal for export. The answer to this point is that the Ministry in the above circular has come out with the clarification. At para 6 of the circular, it has been clearly clarified that in case of clearance of goods for export by manufacturer /exporter, shipping bill is filed by the manufacturer/ exporter and .....

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determined accordingly. The above circular of the Board which has been issued recently calling upon the representations from the Trade clearly establishes that so far as the Ministry/Exporter is concerned, the port is the place of removal for exports. In the instant case, the fact that the appellants are manufacturer/Exporter is not denied. Therefore, the instructions from the Ministry/CBEC referred to above are squarely applicable to the facts of this case and this instruction is binding on th .....

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Tribunal decision, we hold that in the instant case, the service tax paid on DTA services, CHA services and their services up to the port would be service up to the place of removal and would be eligible to cenvat credit in terms of the definition itself. 8. Apart from the circular referred to above, the following rulings hold that in the case of export of goods, the place of removal is the port from where the goods are exported. 1. CCE, Madurai vs Tata Coffee Lex 2013-TIOL - 209 CESTAT, Madras. .....

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