2015 (8) TMI 302 - AT - Service Tax

Benefit of Cenvat Credit - GTA services - outward GTA service credit was availed by the appellant with respect to services availed after the place of removal - Held that - The definition of inputs service is given in Rule 2 (l) of the Cenvat Credit Rules, and conveys that Cenvat Credit is admissible to an assessee upto the place of removal . - point where Sale takes place or any other place or premises from where the excisable goods are to be sold after their clearance from the factory, also becomes the place of removal . The entire transportation cost and transit insurance are paid by the appellant. - Decided against Revenue.

Summary

Issues:
- Appeal filed by Revenue regarding Cenvat Credit on GTA services
- Interpretation of 'place of removal' under Cenvat Credit Rules, 2004
- Application of CBEC Circulars in determining 'place of removal'

Analysis:
The appeal was filed by the Revenue challenging the order-in-appeal allowing the benefit of Cenvat Credit on GTA services. The Commissioner (appeal) had set aside the earlier order disallowing the credit on the grounds that the outward GTA service credit was availed after the place of removal. The Revenue argued that the GTA credit for service tax paid from the factory gate to the place of delivery is not covered under Rule 2(l) of the Cenvat Credit Rules, 2004. The definition of 'place of removal' under Section 4(3)(C) of the Central Excise Act, 1944 was crucial in this case.

The Respondent contended that the first appellate authority correctly determined that the delivery of goods to the buyers from the factory was on a FOR destination basis. The Respondent relied on a case law and CBEC Circulars to support their argument that the place of removal was the buyer's premises, emphasizing the transfer of property in goods to the buyer at the buyer's doorstep. The Respondent highlighted the relevance of transportation charges, inclusion of transport charges in the price of goods, and payment of transit insurance in determining the 'place of removal'.

Upon hearing both sides and examining the case records, the Tribunal considered the definition of inputs service under Rule 2(l) of the Cenvat Credit Rules, which allows credit up to the 'place of removal'. Referring to the definition of 'place of removal' under Section 4(3)(C) of the Central Excise Act, the Tribunal noted that the point where the sale takes place or where the excisable goods are to be sold after clearance from the factory constitutes the 'place of removal'. The Tribunal also referenced a relevant CBEC Circular emphasizing that the determination of 'place of removal' should be based on the point of sale or when the property in goods passes from the seller to the buyer.

In conclusion, the Tribunal dismissed the appeal filed by the Revenue, affirming the decision to allow the Cenvat Credit on GTA services based on the interpretation of the 'place of removal' and the relevant CBEC Circulars.