Exporter entitled to Cenvat credit on transportation services to port of export

The appellate tribunal allowed the appeal, holding that the appellant, as an exporter, was entitled to avail Cenvat credit on transportation services up to the port of export. The tribunal determined that until goods reach the port for export outside India, the place of removal had not been reached, thus allowing the credit. The impugned order denying the credit was set aside, and the appellant was granted consequential relief.

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Issues:
Appeal against denial of Cenvat credit on business auxiliary service, banking and financial services, and transportation by road and rail services for export of goods beyond the place of removal.

Analysis:
The appellant, a manufacturer and exporter of goods, appealed against the denial of Cenvat credit on services availed beyond the place of removal for export. The adjudicating authority initially dropped the proceedings, but the Ld. Commissioner (Appeal) upheld the denial of Cenvat credit. The appellant contended that as an exporter, they availed services up to the port of export and were entitled to Cenvat credit as per CBEC Circular No. 999/06/2015-CX, dated 28-2-2015.

The Ld. AR argued that transportation services beyond the ICD were not eligible for Cenvat credit, and for other services, only a proportionate credit should be allowed. The appellate tribunal considered the submissions and held that as an exporter, the appellant was entitled to avail Cenvat credit on the services in question. The issue to be decided was whether the place where goods are taken outside India constitutes the place of removal.

Referring to the definition of export under Section 2(18) of the Customs Act, 1962, which states that goods must be taken outside India for export to occur, the tribunal concluded that until goods reach the port for export outside India, the place of removal is not reached. Therefore, the appellant was entitled to Cenvat credit on transportation charges up to the port of export. The impugned order was set aside, and the appeal was allowed with consequential relief.

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