2021 (6) TMI 27 - AT - Central Excise

CENVAT Credit - input services - Goods Transport Agency Service - Custom House Agent Service - place of removal - credit denied on the ground that the transportation service used from the factory gate to the buyers place is beyond the factory gate - HELD THAT - It is admitted fact that appellant have delivered the goods to the buyer s place on FOR basis, the freight element was not charged separately, it is included in the assessable value on which excise duty was paid. In this regard the learned adjudicating authority also considered the CA certificate showing that the freight charges is integral part of the assessable value of the finished goods - It was held in the case of THE COMMISSIONER, CENRTAL GOODS AND SERVICE TAX VERSUS M/S. ULTRATECH CEMENT LTD. 2020 (3) TMI 1206 - GUJARAT HIGH COURT that Appellants are eligible for the cenvat credit of service tax paid on outward freight. CHA service used for export of goods manufactured by the appellant - HELD THAT - It has been consistently held that in case of export the place of removal stands shifted to the port of export therefore all the services which are used beyond the factory gate but up to the port of export falls within the term place of removal hence the Cenvat credit on the service used for removal of goods up to the place of removal is admissible. The CHA service is also used from removal of goods up to place of removal - This issue has been considered by the Hon ble Gujarat High Court in the case of COMMISSIONER VERSUS DYNAMIC INDUSTRIES LTD. 2014 (8) TMI 713 - GUJARAT HIGH COURT wherein CHA service was up held as input services and credit was allowed. Considering the cited judgment, the appellant is entitled for Cenvat credit on CHA service. The appellants are entitled for the Cenvat credit on GTA as well as on CHA service - Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Entitlement to Cenvat Credit for Goods Transport Agency Service
- Entitlement to Cenvat Credit for Custom House Agent Service

Analysis:

Issue 1: Entitlement to Cenvat Credit for Goods Transport Agency Service
The main issue in this case was whether the appellant was entitled to Cenvat Credit for Goods Transport Agency (GTA) Service. The lower authorities had denied the credit, stating that it was only admissible up to the place of removal, which they determined to be the factory gate. However, the appellant argued that since the supply of goods was on FOR basis, with freight charges integral to the assessable value of final goods, the place of removal should be the buyer's place, making the credit admissible. The tribunal referred to previous judgments, including M/S UltraTech Cement Ltd, to support the appellant's claim. The tribunal analyzed the facts, noting that the goods were delivered to the buyer's place on FOR basis with freight charges included in the assessable value, thus allowing the Cenvat Credit for GTA Service.

Issue 2: Entitlement to Cenvat Credit for Custom House Agent Service
Regarding the entitlement to Cenvat Credit for Custom House Agent (CHA) Service, the appellant argued that CHA service was used for the export of goods, and in cases of export, the port of export became the place of removal. Therefore, all services used up to the port of export should be admissible for Cenvat credit. The tribunal agreed with this argument, citing the precedent set by the Hon'ble Gujarat High Court in the case of Dynamic Industries Ltd. The tribunal held that CHA service used from the removal of goods up to the place of removal, in this case, the port of export, was admissible for Cenvat credit.

In conclusion, based on the facts presented and supported by relevant judgments, the tribunal ruled in favor of the appellant, allowing Cenvat Credit for both Goods Transport Agency Service and Custom House Agent Service. The impugned orders were set aside, and the appeals were allowed.