2017 (8) TMI 1098 - AT - Central Excise

CENVAT credit - place of removal - credit denied on the ground that no evidence was produced that the CHA service was used for export of goods and place of removal is not the factory but it is port of exports therefore place of removal is factory gate - Held that - in case where place of removal is not place of export the CHA service is not admissible input service - there is no dispute that CHA service received by the appellant is for export of goods from the port of export hence the same is input service - appeal allowed - decided in favor of appellant.

Summary

Issues:
Cenvat credit on CHA service for export of goods and determination of place of removal.

Analysis:
The appellant availed Cenvat credit on CHA service, which was denied by the department due to lack of evidence showing the CHA service was used for export of goods and the place of removal being considered as the factory gate instead of the port of exports. The appellant argued that as per the purchase order, it is evident that the responsibility of supplying goods lies with them from the factory to the port of export, establishing that the place of removal is the port of export. Therefore, all services used for manufacturing and removal of goods up to the place of removal should be considered as input services, making the credit admissible. The appellant cited relevant judgments in support of their argument.

On the contrary, the respondent reiterated the findings of the impugned order, stating that the appellant failed to provide evidence confirming the port of export as the place of removal. The respondent argued that since the appellant did not submit proof of the place of removal being the port of export, the denial of Cenvat credit was justified. The respondent also cited judgments to support their position.

After considering both sides' submissions, the judge agreed with the appellant's argument. The judge noted that in cases where the place of removal is not the place of export, CHA service is not considered an admissible input service. However, in the present case, the appellant undertook the job of clearance from the factory to the port of export, as evidenced by the purchase order, bill of lading, and other export documents. This established that the place of removal extended to the port of export, not just the factory gate. As the CHA service was received for the export of goods from the port of export, it was deemed an input service. The judge highlighted that the judgments relied upon by the respondent were not applicable since there was no dispute that the place of removal was the port of export. Consequently, the impugned order was set aside, and the appeal was allowed.