2012 (11) TMI 1001 - AT - Central Excise

Denial of CENVAT Credit - Place of removal of finished goods - Department was of the view that this service availed at transshipment point after the removal of the goods has no nexus with the business of the appellant - Held that - place of removal of the goods is the factory gate, as the appellant have admitted this fact in their communication to the Department. The service of manpower supply for loading and unloading of finished goods at the transshipment point has been availed after removal of goods to the transshipment point. In my view, this service has no nexus with the manufacturing business of the appellant Manpower supply is for loading and unloading of the finished goods after removal of the goods from the factory gate and there is no dispute that it is the factory gate which is the place of removal. Moreover, no invoices have been produced to show that duty had been paid on the value which included the expenses at the transshipment point. I am, therefore, of the view that Cenvat credit has been correctly denied - Decided against assessee.

Summary

Issues:
1. Denial of Cenvat credit for services of loading and unloading of finished goods at transshipment point.
2. Nexus of the service availed with the business activity.
3. Time-barred plea for Cenvat credit demand.

Analysis:
1. The appellant, a manufacturer of glass bottles, availed services of manpower supply for loading and unloading of finished goods at a transshipment point in New Delhi. The Department issued a show cause notice for denial of Cenvat credit, recovery of the amount with interest, and imposition of a penalty. The Assistant Commissioner confirmed the demand, and the Commissioner (Appeals) upheld the decision, leading to the current appeal.

2. The appellant argued that the loading and unloading service at the transshipment point is related to their business activity and falls under the definition of 'Input Service.' They contended that the loading and unloading charges are included in the value of goods on which duty has been paid. The appellant presented a Chartered Accountant's certificate to support their claim. However, the Department asserted that the service received after goods clearance from the factory gate, the acknowledged place of removal, lacked nexus with the manufacturing business activity of the appellant.

3. The judge examined the submissions and records, noting that the service at the transshipment point was indeed availed after goods removal. Citing a judgment from the Hon'ble Bombay High Court, it was established that 'activity relating to the business' in the definition of 'input service' pertains only to manufacturing activities, not trading. As the service in question was post-removal and not directly linked to manufacturing, the denial of Cenvat credit was deemed appropriate. Additionally, the absence of invoices showing duty payment on expenses at the transshipment point further supported the decision to deny the credit.

4. Addressing the plea of time-bar for Cenvat credit demand, the appellant claimed no willful misstatement or suppression of facts, stating that they had disclosed the credit availed in their ER-1 returns. However, as the ER-1 returns were not provided to demonstrate specific disclosure of the credit for services at the transshipment point, the judge found no merit in the time-barred argument and upheld the impugned order.

5. Consequently, the appeal was dismissed, affirming the denial of Cenvat credit for the loading and unloading services at the transshipment point, as the service lacked nexus with the manufacturing business activity of the appellant, and the plea of time-bar for Cenvat credit demand was not substantiated with sufficient evidence.