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TMI Blog2018 (2) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... ng at the relevant time i.e. prior to April 1, 2008, service used by the manufacturer of clearance of final products ‘from the place of removal’ to the warehouse or customer’s place etc., was exigible for Cenvat Credit - The matter is squarely covered by the Board’s Circular dated August 23, 2007, which states that the credit of the service tax paid on the transportation up to such place of sale would be admissible if it can be established by the claimant of such credit that the sale and the transfer of property in goods occurred at the said place. Once it is accepted that place of removal is the factory premises of the assessee, outward transportation ‘from the said place’ would clearly amount to input service. That place can be warehou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es etc. at their Tanuku, Taduvai Bhimadole units and manufacturers of various inorganic chemicals at their Kovvur and Saggonda units. They were availing credit on inputs, capital goods and input services and utlising the same for payment of duty. It came to the notice of the Revenue that during the periods December, 2007, the respondent at their unit Saggonda, had taken credit of input services namely service tax paid on transportation charges upto the place of customers which according to the Revenue is inadmissible. Accordingly, show cause notice dated November 3, 2008 was issued to the respondent demanding the Cenvat Credit of ₹ 3,87,763/- availed during the above mentioned period along with interest and proposing to impose penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed judgment dated July 16, 2014 has dismissed the appeal filed by the Revenue holding that on an identical issue, this Court dismissed Central Excise Appeal No. 31 of 2013. Hence, this appeal is also dismissed. 4) Before we proceed further, it would be necessary to take note of the definition of input service which was prevailing at the relevant period i.e. prior to April 1, 2008. This definition contained in Section 2(l) of the Rules, 2004 reads as under: 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 from the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfied to cover the case within place of removal . The three conditions contained in the circular are (i) regarding ownership of the goods till the delivery of the goods at the purchaser s door step; (ii) seller bearing the risk of or loss or damage to the goods during transit to the destination and; (iii) freight charges to be integral part of the price of the goods. 6) As mentioned above, in these cases, the assessees are claiming Cenvat Credit in respect of service tax paid on outward transportation from their factory to the premises of customers. As per the Department, outward transportation engaged for removal of goods from factory to customer premises cannot be considered as an input service since premises of customer is not recogn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to the clearance from the place of removal and service used for outward transportation upto the place of removal are to be treated as input service. The first clause does not mention transport service in particular. The second clause restricts transport service credit upto the place of removal. When these two clauses are read together, it becomes clear that transport service credit cannot go beyond transport upto the place of removal. The two clauses, the one dealing with general provision and other dealing with a specific item, are not to be read disjunctively so as to bring about conflict to defeat the laws scheme. The purpose of interpretation is to find harmony and reconciliation among the various provisions . Similarly, in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory; from where such goods are removed. It is, therefore, clear that for a manufacturer /consignor, the eligibility to avail credit of the service tax paid on the transportation during removal of excisable goods would depend upon the place of removal as per the definition. In case of a factory gate sale, sale from a non-duty paid warehouse, or from a duty paid depot (from where the excisable goods are sold, after their clearance from the factory), the determination of the place of removal does not pose much problem. However, there may be situations where the manufacturer /consignor may claim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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