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CX - Export price is CIF, therefore, place of removal in case of export stands extended up to port - Transportation incurred for clearances of goods from factory to port is within term 'clearances of final products upto place of removal' therefore GTA is an Input service even after amendment: CESTAT

BY TIOL News Service

MUMBAI, DEC 14, 2015: THE appellant is a manufacturer of Pet Polyester Chips and avails CENVAT credit facility. During the course of scrutiny of the records, it was noticed that appellant had availed CENVATcredit of service tax paid on the freight charges for outward transportation of the goods cleared for export from the factory. The department contended that outward transportation of the goods from the place of removal is not a service defined as an input service under CCR and hence the credit was inadmissible. The period involved is April 2008 -Jun 2008.

The lower authorities confirmed the demand on the ground that prior to April 2008,CENVAT Credit on outward transportation was available on the service used for clearances of the goods ‘from the place of removal' whereas after April 2008, due to amendment in the CCR the credit on outward transportation is admissible only ‘up to the place of removal'.

Aggrieved, the appellant filed an appeal before the CESTAT.

None appeared on behalf of the appellant.

After considering the submissions made by the AR and on perusal of the records, the Bench observed -

+ In the present case, as per the lower authorities the place of removal is the factory gate and, therefore, credit could not be allowed beyond the place of removal i.e. factory gate. The goods have been cleared for export from the place of removal.

+ In case of export, ownership of the goods remains with exporter and, therefore, all the expenditure for the clearances of the goods up to port is borne by the exporters and in the present case also the export price is CIF therefore place of removal in case of export stand extended up to port.

+ The transportation incurred for clearances of the goods from factory to the port is within the term of "clearances of goods up to the place of removal" therefore GTA is a service in the present case covered under the definition of input service even after amendment vide notification No. 10/2008-CE (N.T.).

Holding that the CENVAT credit on the outward GTA is admissible, the orders were set aside and the appeals were allowed with consequential relief.

(See 2015-TIOL-2659-CESTAT-MUM )


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