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2024 (4) TMI 817 - CESTAT NEW DELHICENVAT credit of service tax paid - goods transport agency [GTA] service availed for outward transportation of goods on Free on Road [FOR] destination basis from the factory gate or depot of the appellant to the premises of the customers - place of removal - rules 2(l) of the CENVAT Credit Rules, 2004 - HELD THAT:- It is clear from rule 2(l) of the 2004 Rules that w.e.f. 01.03.2008, ‘input service’ means any service used by a manufacturer, directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal - The word ‘place of removal’, therefore, assume importance. According to the appellant, the ‘place of removal’ will be the premises of the buyers as the sale is on FOR destination basis, while according to the department the ‘place of removal’ would be the factory gate of the appellant. The ‘input service’ would mean any service used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the ‘place of removal’ and ‘place of removal’ would be a depot or any other place of premises from where the excisable goods are to be sold after the clearance from the factory - prior to 11.07.2014 it was section 4(3)(c) of the Central Excise Act that defined ‘place of removal’ and w.e.f. 11.07.2014 rule 2(qa) of the 2004 Rules itself defines ‘place of removal’. A perusal of the aforesaid judgment of the Supreme Court in COMMISSIONER OF CENTRAL EXCISE SERVICE TAX VERSUS ULTRA TECH CEMENT LTD. [2018 (2) TMI 117 - SUPREME COURT] would indicate that the Supreme Court did not lay down the principles for ascertaining the ‘place of removal’ in the context of admissibility of CENVAT credit on GTA services and the judgment only dealt with the change brought about by the amendment made in rule 2(l) of the 2004 Rules on 01.03.2008. In COMMISSIONER, CUSTOMS AND CENTRAL EXCISE, AURANGABAD VERSUS M/S ROOFIT INDUSTRIES LTD. [2015 (4) TMI 857 - SUPREME COURT], the Supreme Court noticed that the ‘place of removal’ becomes a determinative factor for the purpose of valuation and it has to be seen at what point of time sale is effected, namely whether it is on the factory gate or a later point of time when the delivery of goods is effected to the buyer at the premises of the buyer. The Supreme Court observed that the charges which are to be added have to be upto the stage of transfer of the ownership in as much as once the ownership in goods stands transferred to the buyer, any expenditure incurred, thereafter, has to be on the account of the buyer and cannot be a component which would be included while ascertaining the valuation of goods. It is not possible to accept the contention of the learned authorised representative of the department that sale value is included in the case of FOR sale, but it cannot be presumed that it will also result in availment of CENVAT credit since ‘place of removal’ was not defined in the 2004 Rules till 11.07.2014. Prior to 11.07.2014, ‘place of removal’ was defined in section 4(3)(c) of the Central Excise Act, which definition would be applicable to the 2004 Rules by virtue of rule 2(t) of the 2004 Rules. With effect from 11.07.2014, ‘place of removal’ has been defined in the 2004 Rules. Thus, it has to be held that the appellant would be entitled to avail CENVAT credit of the service tax paid on GTA service from the factory or the depot of the appellant to the premises of the buyers since the sales are on FOR basis. The order passed by the Commissioner (Appeals), therefore, cannot be sustained and is set aside. The appellant would be entitled to avail CENVAT credit - appeal allowed.
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