2018 (11) TMI 972 - AT - Central Excise

CENVAT Credit - input service - outward transportation of goods - place of removal - Held that - The premises of the consignment/selling agents are places of removal as envisaged in the Act and consequently the service tax paid on the freight by the assessee for transportation of goods from the factory to the selling agent s place during the relevant period, is available as Cenvat Credit in terms of the Cenvat Credit Rules, 2004, as an input service - credit allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
- Entitlement to cenvat credit on service tax paid for outward transportation of final products
- Interpretation of 'input service' under Cenvat Credit Rules 2004
- Determination of the place of removal for availing cenvat credit

Entitlement to Cenvat Credit on Service Tax Paid for Outward Transportation:
The appeal was filed by the Revenue against the Commissioner's order dropping proceedings in a show-cause notice where the assessee availed service tax credit for outward transportation of goods. The Revenue alleged that the assessee wrongly availed cenvat credit. The Commissioner found that the transportation of goods from the factory to consignment agents' premises falls under the definition of 'input service.' The Commissioner examined documents showing stock transfers to consignment agents, payment of duty at the factory gate, and sales from consignment agents' premises. The Commissioner concluded that service tax paid on freight for transportation to consignment agents' places is available as cenvat credit under Cenvat Credit Rules 2004.

Interpretation of 'Input Service' under Cenvat Credit Rules 2004:
The main issue was whether the assessee was entitled to credit for service tax paid on outward transportation of final products from the factory as an 'input service' in relation to manufacture under Cenvat Credit Rules 2004. The Commissioner, after discussing the rules and the place of removal, concluded that transportation to consignment agents' premises qualifies as an 'input service.' The Commissioner's detailed findings highlighted the stock transfers, agreements with selling agents, and sales from consignment agents' premises, supporting the conclusion that consignment agents' places are places of removal as per the Act. The Commissioner's decision was upheld as there was no infirmity in the impugned order.

Determination of the Place of Removal for Availing Cenvat Credit:
The Revenue argued that the Commissioner erred in accepting one place of removal and allowing the benefit of service tax credit. The Revenue contended that the assessee's silence on other products implied multiple places of removal. However, the counsel for the assessee defended the order, stating that the Commissioner rightly concluded that the assessee was entitled to cenvat credit on input services. The Tribunal upheld the Commissioner's decision, emphasizing the detailed reasoning provided by the Commissioner and dismissing the Revenue's appeal.

In conclusion, the Tribunal upheld the Commissioner's decision, ruling in favor of the assessee regarding the entitlement to cenvat credit on service tax paid for outward transportation of final products, interpreting 'input service' under Cenvat Credit Rules 2004, and determining the place of removal for availing cenvat credit.