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TMI Blog2011 (5) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... e hearing was over, both sides have filed written submissions. 3. The relevant facts, in brief, are that the respondent is a manufacturer of zinc, lead, and other concentrates. Original authority denied credit on service tax paid on outward transport of the goods from the factory to Kandla port holding that the GTA services utilised cannot be treated as input services in relation to manufacture and removal of final products by the respondent company. (The order of the original authority related to dispute on Cenvat on other services which are not relevant to the present proceedings.) Commissioner (Appeals), however, held that the GTA services used in the above circumstances has to be treated as input services and allowed the cenvat credit. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... akes place only when the goods are loaded on the ship as the term FOB itself indicates. 5.2 The Board's clarification for treating the GTA services involved in transport of finished goods are subject to the following conditions :- (i) The ownership of goods and the property in the goods remained with the seller of the goods till the delivery of the goods in acceptable condition to the purchaser at his door step; (ii) The seller bore the risk of loss of or damage to the goods during transit to the destination; and (iii) The freight charges were an integral part of the price of goods. 5.3 He submits that in view of the above and in the light of decision of the Hon'ble High Court of Punjab and Haryana in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gets transported to the place of the buyer. There could be contract between the buyer and seller for delivery at any place like their factory gate of the respondent, port area in India, port area in the foreign country or even the premises of the buyer abroad based on terms of the contract. When the goods are handed over to the buyers, at the factory gate, the factory gate is sought to be treated as place of removal. When the goods are handed over at the load port in India, the said port is sought to be treated as place of removal. By the same logic if the exporter takes responsibility to hand over at the foreign port, the port of import in the foreign country may have to be treated as place of removal and if the goods are to be delivered a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e exporter is required to execute bond and the value for the purpose of bond has to be determined under section 4 of the Central Excise Act and the same does not include transport cost. In case the goods cleared for export under bond is not actually exported then, the duty becomes payable on value not including cost of transportation from the factory to the port area. 6.4 If the goods cleared from the factory on payment of duty on FOB basis get destroyed after clearance, the question of seeking remission of duty involved does not arise as liability to duty is not dependent on any event after clearance from the place of removal which is the factory in such a situation. 6.5 The Central Excise valuation Law is common for goods cleared for ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itation to chaos. 8.1 The Rule 2(l) defines input services as follows : "(1) "input service" means any service,- (i) used by a provider of taxable service for providing an output service, or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and [clearance of final products upto the place of removal,] and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness activities, as understood in common parlance. Therefore, the term "activities relating to business" deserves to carefully understood and appreciated. In the inclusive part of the definition activities relating to business have been illustrated. The scope of activities relating to business should be understood by the specific activity mentioned after use of the phrase 'such as'. In the light of the above, there is no scope to treat the term 'outward transportation up to place of removal' as having been included under inclusive definition of "activities relating to business". 9. From the above, the following emerges :- "(a) removal of the final product takes place in this case at the factory gate and the liability to duty arises ..... X X X X Extracts X X X X X X X X Extracts X X X X
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