2017 (1) TMI 143 - AT - Central Excise

CENVAT credit - CHA services - denial on the ground that place of removal is the factory gate therefore any services received beyond the place of removal will not be eligible for the Cenvat Credit - Held that - It has been held by this Tribunal in various judgments that in case of export the port of export is treated as place of removal. The CHA service is provided upto the port of export, hence the CHA service is admissible as input service - in Board Circular dt. 28.2.2015, it is clarified that the port of export is place of removal, therefore the Cenvat credit is admissible on the CHA service - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Eligibility of Cenvat credit for CHA service beyond the place of removal in case of export.

Analysis:
The case involved a dispute regarding the eligibility of Cenvat credit for CHA service received beyond the place of removal in the context of export of goods. The Revenue contended that as per Rule 2(l) of Cenvat Credit Rules 2004, services received beyond the place of removal, which was considered the factory gate, would not be eligible for the credit.

The appellant argued that in cases of export, the place of removal extends up to the port of export, and therefore, services provided and received up to the port of export should be considered as used prior to the removal of goods before the place of removal. The appellant relied on a Board's Circular and a Tribunal judgment to support this argument.

The Assistant Commissioner for the Revenue reiterated the findings of the impugned order, emphasizing that the place of removal is the factory gate, and CHA service does not fall under the definition of input service as per Rule 2(l) of the Cenvat Credit Rules 2004.

The Member (Judicial) analyzed the submissions from both sides and referred to various judgments and a Board's Circular to support the conclusion that in cases of export, the port of export should be considered as the place of removal. The Circular clarified that when goods are cleared for export, the port of export is where the transfer of property can be said to have taken place, making it the place of removal. The Member found that the CHA service provided up to the port of export is admissible as an input service, and therefore, the Cenvat credit for the service is allowed. The impugned order was set aside, and the appeal was allowed.