Cenvat credit on CHA/C&F service etc. at Port as per Board's Circular Dt 28.2.15

[G GOSWAMI]

This refers to the Para 6 of the Board’s Circular No. 999/6/2015-CX Dated 28.2.2015 wherein it has been clarified that “………place of removal would be this Port/ICD/CFS. Needless to say, eligibility to CENVAT Credit shall be determined accordingly”.

Though it has been held in several prominent judicial pronouncement and the Board’s Circular No. 97/8/2007 Dt.23.8.2007, that in respect of the excisable goods cleared from factory for export and subsequently shipped from the port, the port of export could be held to be the ‘place of removal’ and the manufacturer exporters are entitled to treat CHA service/CandF Service/GTA service/other expenses at port area as ‘input services’ under Rule 2(1) of the CENVAT Credit Rules, 2004 as these services were used for clearance of excisable goods from the ‘place of removal’,- the Excise authority is still issuing demand notice in this issue and the lower authority is also confirming the same. My earnest request to kindly opine on this Board’s Circular dated 28.2.2015 whether -

1. - it has retrospective effect since the same is clarificatory in nature.

2. -now pending adjudication on this issue could be adjudicated in favour of the assessee since this circular is binding in nature to the Department..

3.- issuing of pending/forthcoming demand notice (generally raised out of Audit objection) could be stopped.

4. -how the assessee could be benefited from this new circular.

Regards,

G.Goswami, 9.3.2015

[Mahir S]

Sir,

Department contention is correct as much as that the said circular specifically pertains to input service credit on freight outward transportation up to the place of removal.

However, your query pertains to input credit on CHA/CandF Service which are performed after the manufacture of goods and does not directly relates to manufacturing activity/output service.

[G GOSWAMI]

Respected Mr. Naveed S,

Thanks for your view in the matter. But kindly see that the said Board's Circular No 999/6/2015 dt.28.2.2015 has only clarified long standing dispute regarding "Place of Removal" for Export and allowed Cenvat Credit at port area irrespective of credit of transportation. Service Tax on Transportation charges for export has already been exempted vide amended notification of 31/12-ST and under para 7.7 of TRU letter 334/5/2015 dt.28.2.2015. There are catena of judgment where CHA and Cand F services have been admitted as eligible input service credit.Very few contra decisions are also there due to mainly absence of clear clarification on "Place of removal" for export which has now been clarified. We shall be obliged if you kindly enlighten us on the basis of this discussion.

Regards,

G.Goswami

AI Summary

Place of Removal clarification confirms port/ICD/CFS as removal point, allowing Cenvat credit for services used for export clearance. The circular designates the port/ICD/CFS as the place of removal for exported goods and directs that eligibility to CENVAT credit be determined accordingly, addressing whether port area services (CHA, C&F, GTA and related services) qualify as input services used for clearance from that place of removal.