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2015 (1) TMI 1136 - AT - Central ExciseCENVAT Credit - Business Support Services - interest and penalty under Rule 15 of Cenvat Credit Rules read with Section 11AC - Determination of place of removal - Held that - In view of the Circular dated 23.8.2007, it is clearly provided therein that eligibility to availing CENVAT Credit of Service Tax paid is dependent upon the place of removal, in the facts and circumstances, which may even include sale taking place at the destination point and the Hon'ble High Court of Punjab & Haryana in the case of Ambuja Cements Ltd. Vs. UOI - 2009 (2) TMI 50 - PUNJAB & HARYANA HIGH COURT in respect of Goods Transport Agency services, being outward freight, when paid by manufacturer upto customer's door step, have found that credit availed on such services is admissible, for ownership of the goods remained with the seller till delivery at customer's door step, transit insurance borne by the assessee and property in goods not transferred to buyer till delivery and freight charges forming part of value of excisable goods and borne by the assessee on FOR destination basis, CENVAT Credit is allowable and also held that CBEC&C's Circular is binding on the Revenue - Commissioner (Appeals) has erred in the facts and circumstances of the case, that the place of removal is not port, but the factory gate. I hold that in the facts and circumstances of the case, the place of removal is port and accordingly, I set aside the impugned order - Decided in favour of assessee.
Issues:
- Availment of CENVAT Credit on Service Tax paid for business support services related to export of goods - Interpretation of place of removal for eligibility of CENVAT Credit - Application of relevant circulars and case laws in determining CENVAT Credit eligibility Analysis: Issue 1: Availment of CENVAT Credit on Service Tax for Business Support Services The appellant, a manufacturer of excisable goods, availed CENVAT Credit on Service Tax paid for various business support services related to the export of goods. The Revenue contended that the appellant wrongly availed the credit as the place of removal was considered the factory gate, not the port of export. A show-cause notice was issued, leading to a confirmed demand, interest, and penalties. The Commissioner (Appeals) rejected the appeal, except for setting aside the penalty under Rule 25 of Central Excise Rules, 2007. Issue 2: Interpretation of Place of Removal for CENVAT Credit Eligibility The appellant argued that the issue had been previously decided in favor of the assessee by the Tribunal in a similar case. Reference was made to the definition of place of removal under Section 4(3)(c) of the Act, highlighting that the port of export should be considered as the place of removal for export clearance. The Tribunal observed that in cases of export on FOB/CIF basis, the place of removal is the load port. Input services related to outward transportation up to the place of removal were deemed eligible for CENVAT Credit. Issue 3: Application of Circulars and Case Laws The Tribunal considered Circular No. 97/8/2007-Service Tax and the ruling in Commissioner Vs. Rolex Rings Pvt. Ltd. to support the appellant's claim for CENVAT Credit on services related to outward transportation and handling for export. The Tribunal emphasized that the Circular's directions on determining the place of removal should be followed based on the facts and circumstances of each case. Additionally, the Tribunal referred to a High Court case supporting the admissibility of credit on outward freight services up to the customer's door step. In conclusion, the Tribunal set aside the impugned order and allowed the appeal, determining that the place of removal for the appellant was the port, not the factory gate. The appellant was granted consequential benefits based on this decision.
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