TMI Blog2016 (4) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... In substance, the service recipient of the transportation is called the person liable to pay service tax. Once service tax is levied under Section 66 of the Finance Act, 1994 that becomes admissible credit for the grant under the scheme of Cenvat Credit Rules, 2004. Therefore, the service tax paid in terms of the reverse charge mechanism under Section 68 of the Finance Act, 1994 read with Section 19 of the Sale of Goods Act, 1930 and the circular aforesaid becomes input service to fulfill contractual obligation. That does not disentitle the tax payer to the Cenvat credit of the service tax paid in respect of transport service availed to make delivery of goods at the destination which otherwise would make the rule of cascading effect otios and export shall be taxable. That is not permitted. Even for this reason also the assessees are entitled to Cenvat credit. So far as the export of goods are concerned, following the aforesaid rationale, the service tax paid availing transportation service shall be admissible to the Cenvat credit or refundable where that is not possible to be set off against future liability. It is also submitted in the Bar that C&F and CHA services were availed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax paid on transportation of such goods from any of the above places or such tax refundable under Rule 5 of the Cenvat Credit Rules, 2004 wherever the Cenvat credit is not adjustible; and (ii) Whether Cenvat Credit is admissible in respect of service tax paid on transportation of the goods cleared from the places in question (i) above for delivery at the place of the buyer as per the terms of the contract of sale between the parties prior to 01.04.2008 and thereafter. 2.1 It is submitted on behalf of the appellants that to answer the first question, the material fact is that the appellants are exporters of goods which is not disputed by Revenue. They exported the goods clearing the same from the factory, depot or any other place of removal as the case may be and transported that paying service tax, to the place of export. The service tax so suffered was claimed as Cenvat credit by the exporter-assessees on the ground that the transportation service so availed was input service for export. But that was denied by Revenue. Further, wherever such tax was not adjustable towards Cenvat credit; refund thereof was claimed under Rule 5 of Cenvat Credit Rules, 2004. Such claims wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, 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, accounting, auditing, financing, recruitment and quality control; coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal; 2.5 Appellants submitted that with the above background of law relating to input service , as appearing in statute book, the place where actual delivery of goods takes place occasioning transfer of property in goods thereat, the transport service should be construed to have been provided upto the place of removal . After 11.07.2014, the concept of place of removal was defined by Rule 2(qa) of Cenvat Credit Rules, 2004 to read as under:- (qa) 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 or premises wherein the excisable goods have been permitted to be deposited with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty in the goods is to pass to the buyer. 6. Keeping in view the basic structure of the common law as to ownership of the goods, property therein and transferability thereof, the CBE C vide its Circular No.999/6/2015-Cx., dated 28.02.2015 came out with guideline as to how to construe the meaning of the term place of removal . So far as the export is concerned, answer is given in para 6 of the circular as under:- 6. In the case of clearance of goods for export by manufacturer exporter, shipping bill is filed by the manufacturer exporter and goods are handed over to the shipping line. After Let Export Order is issued, it is the responsibility of the shipping line to ship the goods to the foreign buyer with the exporter having no control over the goods. In such a situation, transfer of property can be said to have taken place at the port where the shipping bill is filed by the manufacturer exporter and place of removal would be this Port/ICD/CFS. Needless to say, eligibility to CENVAT Credit shall be determined accordingly. [Emphasis supplied] 7. So far as the normal domestic sale is concerned, the answer is given by para 3 of the circular as under:- 3. The mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvat Credit Rules, 2004 and are not defined therein but are defined in the Central Excise Act, 1944 or the Finance Act, 1994, they shall have the same meaning for the Cenvat Credit Rules as assigned to them in those Acts. The phrase place of removal is defined under section 4 of the Central Excise Act, 1944. It states that, - 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 or premises wherein the excisable goods have been permitted to be stored 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.- It is, therefore, clear that for a manufacturer/consignor, the eligibility to avail credit of the service tax paid on the transportation during removal of excisable goods would depend upon the place of removal as per the definition. In case of a factory gate sale, sale from a non-duty paid warehouse, or from a duty paid depot (from where the excisable goods are sold, after their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the buyer at such time as the parties to the contract intend to do so. This is mandate of Section 19 (1) of the Sale of Goods Act, 1930. The intention of the parties is elucidated by sub-section (2) thereof. That can be ascertained having regard to the terms of the contract, the conduct of the parties and circumstances of the case. Sub-section (3) of Section 19 covers a situation not covered by sub-section (2) of Section 19. In such circumstances, Rule 20 to 24 of the Sale of goods Act, 1930 shall apply for ascertaining the intention of the parties as to the time at which the property in goods is to pass to the buyer. 12. The codified provisions in Sale of Goods Act, 1930 in the manner described above has been adopted by Boards Circular No.999/6/2015-CX., dated 28.02.2015 aforesaid. Therefore, there should not be any ambiguity by the Adjudicating Authority to understand the concept of sale where that takes place and the intention of the parties entitling the seller of the goods to the Cenvat credit of the service tax paid on transportation of the goods to the place of export or for delivery thereof at the place agreed between the parties. 13. It may further be stated that Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
