2016 (7) TMI 1072 - AT - Central Excise

Cenvat Credit - eligible input services - service tax paid on loading charges for loading the goods from their godown into their customer s vehicles - Held that - based on the definition of place of removal, the premises of C&F agent would be treated as place of removal and hence the goods which are being sold from C&F Agent s premises, would be the place of removal . Therefore, the availment of credit of both loading as well as delivery charges are in order and therefore the impugned order is liable to be set aside. - Decided in favor of assessee.

Summary

Issues involved:
Cenvat credit eligibility on loading and delivery charges beyond place of removal.

Analysis:
The case involved two appeals arising from a common order-in-appeal by the Commissioner of Central Excise. The Appellant, a manufacturer of Dry Mix Plasters, was availing cenvat credit on various inputs, capital goods, and input services. The Department alleged that the Appellant had wrongly availed credit on service tax paid for loading and delivery charges beyond the place of removal. The Department contended that such charges were not eligible for credit as they occurred beyond the place of removal.

The Appellant argued that they were eligible for the credit based on a broader perspective of CENVAT credit rules. They contended that the definition of input services includes services not directly related to the manufacture of final products and that penalties imposed were unjustified as they were eligible for the credit.

The First Appellate authority upheld the disallowance of credits and imposed penalties, except for the penalty on delivery charges. The Appellant appealed this decision, challenging the denial of credit for loading and delivery charges beyond the place of removal.

Upon review, the Tribunal found that the denial of credit was based on an incorrect interpretation of the definition of "input service." The Tribunal emphasized that as long as the services are related to the clearance of final products up to the place of removal, credit is eligible. The definition of "place of removal" was crucial, and the Tribunal clarified that the premises of the C&F agent could be considered the place of removal. Therefore, the Tribunal set aside the disallowance of credit on loading and delivery charges and also nullified the penalties imposed.

In conclusion, the Tribunal allowed both appeals, emphasizing the correct interpretation of the definition of "place of removal" and the eligibility of credit for loading and delivery charges related to the clearance of final products up to the place of removal.