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2024 (7) TMI 1453 - AT - Central ExciseCENVAT Credit - input service - clearing and forwarding agency service - denial of credit on the ground that warehouses and dealers points are not the place of removal - whether the warehouse / depots are the place of removal or not? - HELD THAT - As apparent from the said definition clause (2) thereof includes warehouse to be a place of removal and clause (3) thereof includes depots as the place of removal. Admittedly, the cement manufactured by the appellant has been transferred to the warehouse/depot. Admittedly, the C F Agency service is obtained for the transit from factory to warehouse or depot. As already observed from the above definition, the warehouses as well as depot are also the place of removal. The decision of Bombay High Court in the case of CCE, NAGPUR VERSUS ULTRATECH CEMENT LTD., 2010 (10) TMI 13 - BOMBAY HIGH COURT as relied upon by the appellant has been upheld by Hon ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX VERSUS ULTRA TECH CEMENT LTD. 2018 (2) TMI 117 - SUPREME COURT . The ratio of the decision is that all input services as has been received till the place of removal are eligible for the availment of Cenvat Credit. Thus, it is clear that the service of C F agent as received by the appellant since was received till the place of removal; it is held that appellant is eligible for the availment of Cenvat Credit. The denial of said availment is not sustainable. The order under challenge is liable to be set aside - appeal allowed.
Issues:
1. Denial of Cenvat credit on clearing and forwarding agency service. 2. Determination of whether warehouse/depots are considered the place of removal. Analysis: Issue 1: Denial of Cenvat credit on clearing and forwarding agency service The appellant, engaged in cement and clinker manufacturing, was denied Cenvat credit for service tax paid on clearing and forwarding agency service. The Department alleged that the service was not an eligible input service under Rule 3 and 4 of Cenvat Credit Rules, 2004. The Show Cause Notice proposed the reversal of the availed Cenvat Credit amount, along with interest and penalties. The initial proposal was confirmed in the Order-in-Original No.50/2021, and the appeal against it was rejected in Order-in-Appeal No.139/2020. The appellant contended that the C & F Agency Service is an input service, citing precedents like Ambuja Cements Ltd. vs. Commissioner of Central Excise and Service Tax. Various decisions were relied upon to support the appellant's argument, emphasizing that the warehouse/dealer depots are considered the place of removal as per the CCR 2004 definition. Issue 2: Determination of whether warehouse/depots are considered the place of removal The Tribunal analyzed whether the warehouse/depots where the goods were transferred after manufacturing were indeed the place of removal. Referring to the definition in Rule 2 of CCR 2004, which includes warehouses and depots as places of removal, it was observed that the C & F Agency service was utilized for transit from the factory to these locations. Relying on the decision of the Bombay High Court in Ultratech Cement Ltd., upheld by the Supreme Court, it was established that all input services received until the place of removal are eligible for Cenvat Credit. Consequently, the Tribunal held that the appellant was entitled to avail Cenvat Credit for the services received until the place of removal, and the denial of such credit was deemed unsustainable. The order denying the credit was set aside, and the appeal was allowed, emphasizing that the Commissioner (Appeals) had not followed judicial protocol. In conclusion, the Tribunal ruled in favor of the appellant, allowing the appeal and setting aside the order that denied Cenvat credit on the clearing and forwarding agency service.
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