2016 (5) TMI 1240 - AT - Central Excise

Admissibility - Cenvat Credit of GTA Services availed by the Appellant from the factory gate to their godown/depots - Held that - the goods are sold from the godowns/depots of the Appellant and no sales are effected at the factory gate. Reliance placed by the department on the wording of Notification No.20/2007-CE dated 25.04.2007 to the effect that place of removal and point of clearance will be the factory gate of the Appellant is mis-placed and is not the correct appreciation of law made by the First Appellate Authority. In the light of definition of input service given in Rule 2(l) of CCR read with the definition of place of removal as defined in Section 4(2)(c) of the Central Excise Act it is held that input service credit of the services availed upto the place of removal is admissible and in the present Appeals filed by the Appellant the place of removal will be godown/depots from where goods are sold and not the factory gate. - Decided in favour of appellant

Summary

Issues:
1. Interpretation of Cenvat Credit Rules regarding the admissibility of GTA services availed by the Appellant.
2. Determination of the place of removal for the purpose of Cenvat Credit eligibility under Notification No.20/2007-CE dated 25.04.2007.

Analysis:
1. The Appellant argued that their godown in Siliguri and depots outside Sikkim should be considered as the place of removal under Rule 2(l) of the Cenvat Credit Rules, allowing credit up to the place of removal. The First Appellate Authority had rejected this claim based on the interpretation that the factory gate is the place of removal as per Notification No.20/2007-CE dated 25.04.2007. The Appellant's consultant contended that the law under Rule 2(l) of CCR supports their claim for Cenvat Credit of GTA Services up to the place of removal.

2. The Revenue argued that the benefit under Notification No.20/2007-CE dated 25.04.2007 is applicable only to units in specific states, with duty payable at the factory gate. The contention was that Cenvat Credit for services from the factory gate to the place of sale is not admissible, emphasizing that the factory gate is the place of clearance and removal as per the exemption notification.

3. The Tribunal examined the issue of whether Cenvat Credit for GTA services up to the place of removal is admissible. Referring to Rule 2(l) of CCR, the definition of input services includes those used in relation to the clearance of final products up to the place of removal. The definition of place of removal in Section 4(3)(c) of the Central Excise Act includes depots or premises from where goods are sold after clearance from the factory. The Tribunal concluded that the place of removal need not always be the factory gate, and in this case, the godowns/depots where goods are sold should be considered the place of removal. Therefore, the Appellant was allowed Cenvat Credit for services availed up to the place of removal, overturning the First Appellate Authority's decision.

4. Consequently, the Appeals filed by the Appellant were allowed, setting aside the Order-in-Appeal dated 13.08.2014. The Tribunal's decision clarified that the place of removal for Cenvat Credit eligibility is the godown/depots from where goods are sold, not limited to the factory gate as contended by the Revenue.