2014 (10) TMI 128 - AT - Central Excise

Determining the Place of Removal for CENVAT Credit on Goods Transport Agency Services

COMMISSIONER OF CENTRAL EXCISE, RAIGAD Versus M/s POSITIVE PACKAGING INDUSTRIES LTD

The appellate tribunal upheld the lower appellate authority's decision that the place of removal for goods sold domestically or exported was the buyer's ... CENVAT Credit - Whether the appellants were eligible for CENVAT Credit of Service Tax paid on 'onward transportation' for delivery of final products upto the customer's premise or port of export - Held that:- From the copies of invoices and the respective purchase orders it is seen that the terms of delivery of goods have been specified in the purchase orders. In some purchase order the terms is specified as 'free delivery to our factory' or 'FOB destination' or 'delivery charges inclusive' or 'delivery at Goa Plant' etc. This clearly indicates that the price of the goods was inclusive of delivery charges and the ownership of the goods remained with the appellants during the transit and the same passed on to the buyer only on delivery at the delivery point. Similarly, the insurance policy drawn in favour of the appellants also indicates that the ownership of the goods in question remained with the appellants till the delivery point - Following decision of ABB Ltd. [2011 (3) TMI 248 - KARNATAKA HIGH COURT] and Parth Poly Pvt. Ltd. [2011 (4) TMI 975 - GUJARAT HIGH COURT] - Decided against Revenue. Issues:1. Interpretation of place of removal for availing CENVAT Credit on Service Tax paid on Goods Transport Agency services.Analysis:The judgment involves two appeals filed by the Revenue against an Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Mumbai-II. The lower appellate authority held that the place of removal for the goods, sold domestically or exported by the respondent, was either the buyer's premises or the port of export. This decision allowed the appellant to avail credit of Service Tax paid on Goods Transport Agency services for transporting goods accordingly. The Revenue challenged this decision, arguing that the place of removal was the factory, not the buyer's premises, and therefore, the services availed were beyond the place of removal, making them ineligible as 'input services'.The Revenue contended that the impugned order failed to consider the factual scenario and incorrectly determined the place of removal. They asserted that the Goods Transport Agency services were availed beyond the place of removal, rendering them ineligible for CENVAT Credit. The learned Addl. Commissioner for the Revenue reiterated these arguments during the appeal proceedings.On the other hand, the respondent presented invoices, purchase orders, and other relevant documents to establish that the place of removal was indeed the buyer's premises for domestic sales and the port of export for exported goods. The lower appellate authority, after reviewing the documents and considering various legal precedents and circulars, affirmed that the place of removal was correctly determined as the buyer's premises or the port of export. The authority's decision was supported by legal precedents such as the case of Ambuja Cement Ltd. and subsequent decisions in similar matters.After carefully considering the submissions from both parties, the appellate tribunal upheld the lower appellate authority's decision. The tribunal found no fault in the order passed by the lower authority and dismissed the Revenue's appeals, deeming them lacking in merit. The judgment emphasized the importance of correctly determining the place of removal for availing CENVAT Credit on Service Tax paid for Goods Transport Agency services, as supported by legal precedents and relevant documents presented during the proceedings.