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TMI Blog2018 (6) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... ity to credit. Considering the nature of expenditure, therefore, the tax paid thereon would have to be neutralized - appeal allowed - decided in favor of appellant. - APPEAL NO: E/88306/2014 - A/86297/2018 - Dated:- 1-5-2018 - Shri C J Mathew, Member (Technical) Ms Manasi Patil, Advocate for appellant Shri C Singh, Assistant Commissioner (AR) for respondent M/s Bharat Petroleum Corporation Ltd is aggrieved by the upholding of demand of ₹ 11,60,958.68, along with charging of interest thereof, and imposition of penalty of like amount under rule 15(2) of CENVAT Credit Rules, 2004 read with section 11AC of Customs Act, 1962 in impugned order-in-appeal no. PD/63/MI/2014 dated 2 nd April 2014 of Commissioner of Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d forwarding activity and the meaning of 'place of removal' in section 4(3)(c) of Central Excise Act, 1944 to hold that such agent stores goods on behalf of the principal and the place of such storage by the agent would be place of removal. It is clear that this decision relied upon the definition of input services as it prevailed prior to 1 st April 2008. Nevertheless, the ratio laid down is that 'clearing and forwarding' activity cannot be delinked from that of the manufacturer. Considering the averment of Learned Counsel that the delivery to customers was effected from the depot belonging to the appellant and that the assessable value adopted for clearance from Wadibunder included the charges of the clearing and forwardi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es is established. Conceptually as well as a matter of policy, any input service that forms a part of the value of the final product should be eligible for the benefit of Cenvat Credit. Revenues contention, if accepted as in the present case, would go against the very core and genesis of Cenvat credit scheme. In our opinion, such an interpretation would be plainly unacceptable. 35. The guidelines issued by OECD that VAT is a consumption tax, accords with the view taken by the Supreme Court, Guidelines issued by Organization for Economic Cooperation and Development (OECD). The relevant portion is extracted below: INTERNATIONAL VAT/GST GUIDELINES PREFACE . 4. In addition, it should be borne in mind that v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iers and the VAT charged to customers. In general, OECD countries with value added taxes impose the tax at all stages and normally allow immediate deduction of taxes on purchases by all but the final consumer. 2. These features give value added taxes their main economic characteristic, that of neutrality. The full right to deduction of input tax through the supply chain, with the exception of the final consumer, ensures the neutrality of the tax, whatever the nature of the product, the structure of the distribution chain and the technical means used for its delivery (stores, physical delivery, Internet). [Emphasis supplied] 36. Though India is not a signatory to OECD Model, it adopts the same model of destination based consumpti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... definition of input service which has been reproduced earlier, can be effectively divided into the following five categories, in so far as a manufacturer is concerned: (i) Any service used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products (ii) Any service used by the manufacturer whether directly or indirectly, in or in relation to clearance of final products from the place of removal (iii) Services used in relation to setting up, modernization, renovation or repairs of a factory, or an office relating to such factory, (iv) Services used in relation to advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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