Place of removal for export clearances governs CENVAT credit on factory-to-port transport, not the factory gate.

CENVAT credit on service tax paid for transporting export goods from the factory to the port was held not deniable on the basis that the factory gate was the place of removal. For manufacturer-exporters, the Board's circular treated the place of removal for export clearances as the port or ICD/CFS where the shipping bill is filed and delivery is made to the shipping line. On that footing, the show-cause notice failed because its sole premise was incorrect; whether the transport cost was borne by the assessee was immaterial to that issue.

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Issues: Whether credit of service tax on transportation of goods from the factory to the port for export was deniable on the premise that the factory gate was the place of removal.

Analysis: The demand was founded solely on the assumption that the factory gate constituted the place of removal. The Board's circular clarified that, in the case of a manufacturer-exporter, the place of removal for export clearances is the port or ICD/CFS where the shipping bill is filed and delivery is made to the shipping line. Since the appellants were manufacturer-exporters, the basis of the show-cause notice failed. The question whether the transportation cost was borne by the appellants was immaterial to that issue.

Conclusion: Credit was not deniable on the ground adopted in the show-cause notice, and the issue was decided in favour of the assessee.

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