Place of Removal - Removal of determinative conditions in place?

Great Article! I would like to supplement following views.

(1) Definition of the term “place of removal” as given at Section 4(3)(c) of the CEA, 1944, meant for that Section, was also applicable to Cenvat Credit Rules, 2004, in terms of Rule 2(t) of CCR,2004, even prior to insertion of such definition as Rule 2(qa) in CCR,2004 during Budget, 2014.

(2) Earlier, I was under impression that there should be only one place of removal for any consignment of excisable goods. However, this view may not be correct. All places listed at clauses (i), (ii) and (iii) of Section 4(3)(c) qualify as “place of removal” in as much as these clauses have not been separated by “OR” . Also, there is no provision prescribing that if the goods have been sold from depot, the factory ceased to become “place of removal”. This view has been strengthened by following.

(a) CBEC Circular No. 251/85/96-CX dated 14.10.1996 (Extracts) (capitalization of letters applied):

“Point of Doubt
Whether differential Central Excise liability will have to be collected/refunded if the goods are transferred from one sale depot to other sale depot.

Clarification
In case of inter-depot transfer of goods, duty may be initially charged with reference to PLACE OF REMOVAL from where the goods are actually removed/intended to be sold and by charging differential duty, if any, on the basis of assessable value prevalent at the ACTUAL “PLACE OF REMOVAL” i.e. the storage depot etc. from which the goods are finally sold.”

In view of the above clarification it can be said that initial place of removal can be one depot, but the ACTUAL PLACE OF REMOVAL can be another depot from where the goods are finally sold. Similarly, initial place of removal can be factory, but the actual/final place of removal is the place from where the goods are finally sold (property in goods have been transferred).

(b) In the case of Vesuvious India Ltd. – 2013-TIOL-1038-HC-KOL-ST, it has been inter alia observed that the outward transportation charges or taxes paid in regard thereto is claimable (as Cenvat credit) only with regard to those transports which were made FROM ONE PLACE OF REMOVAL TO ANOTHER PLACE OF REMOVAL. (However, determination of ‘place of removal’ was not the issue before High Court in this case.)

It is felt that once “place of removal” has been determined properly, there should be no difficulty in availment of Cenvat credit on “input services” used upto such place of removal and claiming refund of service tax under Notification No. 41/2012-ST for “specified services” used beyond such place of removal in case of export of excisable goods.

These are personal views.

Shvetal Parikh 12/12/2014