2018 (1) TMI 1203 - AT - Central Excise

CENVAT credit - services received from service provider situated abroad for warehousing and handling of the goods stored outside India - Held that - the adjudicating authority has categorically recorded that ownership of the goods remains with the appellant herein at the time of availment of the services, which is a stated position, not disputed by the Revenue before the first appellate authority as the first appellate authority has not recorded any findings on this point, but only records that the port of export of the goods is India hence, it is to be considered as the place of removal even though the ownership of the goods has been transferred to buyer. Tribunal in the case of Imperial Auto Industries 2017 (4) TMI 1048 - CESTAT CHANDIGARH has categorically laid down that the ownership of goods and the property of the goods remain with the seller of the goods till the delivery of goods in acceptable condition to the purchaser at his door step, CENVAT Credit is eligible. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against Order-in-Appeal No. PK/134/RGD/2016 dated 08.12.2016 regarding wrong availment of CENVAT Credit for service tax paid for warehousing and handling services received from a foreign service provider.

Analysis:
The appeal was filed challenging the Order-in-Appeal that dropped the demand raised on the merits and limitation grounds. The first appellate authority considered the case only on the merit of whether service tax credit is available for warehousing and logistics services received at an overseas destination. The authority decided that the appellant was not eligible for CENVAT Credit. The appellant argued that a similar issue was decided in the case of CCE vs. Imperial Auto Industries. The adjudicating authority noted that the ownership of the goods remained with the appellant at the time of availing the services, which was not disputed by the Revenue. The Tribunal in the case of Imperial Auto Industries held that CENVAT Credit is eligible when the ownership of goods remains with the seller until delivery to the purchaser.

The Revenue relied on a circular stating that the place of removal is the port of export when the seller does not reserve the right for delivery of goods. However, in this case, the respondent sold the goods on a Delivered Duty Paid basis, retaining ownership rights. The circular was deemed irrelevant to the present case. Referring to the case of Ambuja Cements, it was established that the seller must meet specific conditions for CENVAT Credit eligibility, including bearing the risk of loss during transit and the freight charges being part of the price of goods. As the respondent complied with these conditions, the Commissioner (Appeals) rightly allowed the credit on courier and transportation charges for transporting goods to the foreign buyer premises. The impugned order was set aside to the extent contested, and the appeal was allowed with consequential relief.

In conclusion, the appeal was allowed, setting aside the impugned order to the extent contested, and providing consequential relief.