TMI Blog2018 (7) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... peal dismissed - decided against Revenue. - E/439/10 - FO/A/76368/2018 - Dated:- 21-6-2018 - Shri P. K. Choudhary, Member (Judicial) and Shri C. L. Mahar, Member (Technical) Shri S. S. Chattopadhyay, Suptd. (AR) for the Revenue None for the Respondent (s) ORDER Per P. K. Choudhary: When the case was called, none appeared on behalf of the respondent assessee. No adjournment request has been received. Since the matter is very old, pertaining to year 2010, the same is taken up for hearing. 2. The facts of the case in brief are that the respondent assessee have sent their finished excisable goods through the transport agency beyond the place of removal, i.e., upto the destination of their customers as well as port and took credit on the Service Tax on such transportation of finished goods. It is the case of the Revenue that the assessee merely arranges for transportation of the goods on behalf of the consignee and was authorized to release payment of transportation on behalf of the customers. A Show Cause Notice was issued for disallowing credit of Service Tax on GTA service under Rule 14 of CENVAT Credit Rules, 2004 along with interest and for imposing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efinition to which the word means applies has to be construed restrictively as it is exhaustive. However, the portion of the definition to which the word includes applies has to be construed liberally as it is extensive. The exhaustive portion of the definition of input service deals with service used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products. It also includes clearance of final products from the place of removal. Therefore, services received or rendered by the manufacturer from the place of removal till it reaches its destination falls within the definition of input service. What are the services that normally a manufacturer would render to a customer from the place of removal? They may be packing, loading, unloading, transportation, delivery, etc. Though the word transportation is not specifically used in the said section in the context in which the phrase clearnace of final products from the place of removal is used, it includes the transportation charges. Because, after the final products has reached the place of removal, to clear the final products nothing more needs to be done, except transporting the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le is from the place of removal . It has to be from the place of removal upto a certain point. Therefore, tax paid on the transportation of the final product from the place of removal upto the first point, whether it is depot or the customer, has to be allowed. 7. The Hon ble Supreme Court in the case of Cus., C. Ex. S.T., Guntur Vs. Andhra Sugars Ltd. reported in 2018 (10) G.S.T.L. 12 (S.C.) have applied the above ratio and decided in favour of the assessee. The relevant paragraphs of the above judgment/decision are reproduced below:- 4 . Before we proceed further, it would be necessary to take note of the definition of input service which was prevailing at the relevant period i.e. prior to April 1, 2008. This definition contained in Section 2(l) of the Rules, 2004 reads as under: Input Service 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 of final products from the place of removal, and includes services used in relation to setting up, modernization, renovation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at credit. 7. Having regard to the definition of input service that was prevailing at the relevant time i.e. prior to April 1, 2008, the aforesaid contention of the Department cannot be accepted. As per the said definition, service used by the manufacturer of clearance of final products from the place of removal to the warehouse or customer s place etc., was exigible for Cenvat credit. This stands finally decided in Civil Appeal No. 11710 of 2016 (Commissioner of Central Excise Belgaum v. M/s. Vasavadatta Cements Ltd.) vide judgment dated January 17, 2018. The matter is squarely covered by the Board s Circular dated August 23, 2007, relevant portion whereof is as under : ISSUE : Up to what stage a manufacturer/consignor can take credit on the service tax paid on goods transport by road? COMMENTS : This issue has been examined in great detail by the CESTAT in the case of M/s. Gujarat Ambuja Cements Ltd. v. CCE, Ludhiana [2007 (6) S.T.R. 249 Tri-D]. In this case, CESTAT has made the following observations :- the post sale transport of manufactured goods is not an input for the manufacturer/consignor. The two clauses in the definition of input services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here 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 clearance from the factory), the determination of the place of removal does not pose much problem. However, there may be situations where the manufacturer/consignor may claim that the sale has taken place at the destination point because in terms of the sale contract/agreement (i) the ownership of goods and the property in the goods remained with the seller of the goods till the delivery of the goods in acceptable condition to the purchaser at his door step; (ii) the seller bore the risk of loss of or damage to the goods during transit to the destination; and (iii) the freight charges were an integral part of the price of goods. In such cases, the credit of the service tax paid on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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