2023 (2) TMI 1030 - AT - Central Excise

CENVAT Credit - input services - clearing and forwarding services - reversal of the Cenvat Credit demanded on the ground that the services have been rendered are beyond the place of removal - HELD THAT - Generally the manufacturer has to move the goods from his factory premises to the ICD/Port of Shipment and then only the physical exports of goods can take place after filing the Shipping Bill and necessary clearance is given by the Customs Department. Para 6 of the Board Circular No.999/6/2015-CX dated 28.2.2015 states that the ICD/Port of shipment is nothing but the extended location of the manufacturing unit only. ICD/Port will also fall within the definition of Place of Removal as held by the Hon ble High Court in the case of Inductotherm 2014 (3) TMI 921 - GUJARAT HIGH COURT . Therefore, all expenses incurred from the factory gate upto ICD/Port of Shipment would also be within the definition of Rule 2(l) of Cenvat Credit Rules 2004, which allows Cenvat Credit upto the place of Removal . The ratio laid down in the Ultra Tech Cement 2018 (2) TMI 117 - SUPREME COURT and Ispat Industry 2015 (10) TMI 613 - SUPREME COURT are fully met in the present case. Accordingly, the appellant would be eligible for the Cenvat Credit for the Service Tax paid on such services. In the Ultra Tech case cited by the Learned Authorized Representative, The Hon ble Supreme Court clearly held that after amendment of Rule 2(l) with effect from 01/03/2008, the Appellant would not be eligible for Cenvat Credit for the freight expenses incurred from the Place of Removal . In the present case, the services are rendered upto the place of Removal . Hence, the ratio Laid down by the Hon ble Supreme Court is fully met. The Aditya Birla Case 2021 (1) TMI 709 - CESTAT KOLKATA cited by the Learned Authorized Representative is on a different issue and is not applicable to the present facts of the case. Since the material facts are same in the present case, respectfully following the decision of Division Bench in the case of Electrosteel Castings Ltd. 2019 (2) TMI 1023 - CESTAT KOLKATA the present Appellant is eligible for the Cenvat Credit taken by them. Appeal allowed.

Summary

Issues:
Eligibility of Cenvat Credit for services rendered by Clearing and Forwarding Agent during exports; Determination of place of removal for availing Cenvat Credit; Applicability of judgments and circulars in deciding Cenvat Credit eligibility.

Analysis:
The judgment addressed the issue of eligibility of Cenvat Credit for services provided by the Clearing and Forwarding Agent (CHA) during exports, specifically focusing on the place of removal for availing such credit. The Appellant availed Cenvat Credit for expenses incurred in the course of exports when goods were transferred from the factory to the port of shipment, but a Show Cause Notice demanded reversal of the credit on the grounds that the services rendered were beyond the place of removal. The Adjudication and Lower Appellate Level confirmed the demand, leading the Appellant to approach the Tribunal for relief.

The Ld. Chartered Accountant for the Appellant argued that the issue revolved around the eligibility of Cenvat Credit for services provided by the CHA during and after the movement of goods until their final clearance from the port. He relied on judgments by the Hon'ble High Court of Gujarat and a Final Order of the Division Bench of the Tribunal to support the Appellant's claim. The Tribunal noted the Gujarat High Court's stance that cargo handling services used for the clearance of final products from the port for export could be considered as 'input services' eligible for Cenvat Credit.

The Learned Authorized Representative contended that the issue of 'Place of Removal', as clarified in the Supreme Court judgment in the CCE Vs. Ispat Industry case, was relevant to the present case. He referenced specific Circulars and judgments to argue that the expenses incurred up to the ICD/Port of Shipment fell within the definition of 'Place of Removal', making the Appellant eligible for Cenvat Credit for the services rendered by the CHA.

The Tribunal, after considering the arguments and case laws cited by both parties, concluded that the expenses incurred from the factory gate up to the ICD/Port of Shipment constituted 'Place of Removal' as per relevant Circulars and judgments. The Tribunal aligned with the decisions in similar cases and allowed the Appellant's appeal, holding them eligible for the Cenvat Credit claimed. The judgment emphasized the importance of the place of removal in determining Cenvat Credit eligibility and found in favor of the Appellant based on the established legal principles and precedents.

In conclusion, the Tribunal allowed the appeal, providing consequential relief to the Appellant, and pronounced the decision on 21st February 2023. The judgment clarified the interpretation of 'Place of Removal' in the context of availing Cenvat Credit for services related to exports, highlighting the significance of legal precedents and circulars in determining such eligibility.