In case of export what is the place of removal? Is it factory premises or port where the goods are put on the board the ship or the aircraft as the case may be?

In an attempt to deny the benefit of Cenvat Creidt on CHA service on the ground that such service has been provided beyond the place of removal, department has raised the demand on the assessee and in the adjudicating order such demand was confirmed by the authority.

Commissioner (Appeals) and CESTAT has allowed the cenvat credit of service tax paid on CHA service by holding that:

"…Where the sale is on FOB/ CIF basis, the place of removal has to be the load port only. Further the definition of input services also has been defined to mean any service rendered in relation to outward transportation up to the place of removal. Since, input service includes services rendered for outward transportation up to the place of removal, all the service tax paid to facilitate goods to reach the place of removal has to be eligible for the benefit of CENVAT credit. Further the definition of input service also includes any service used for manufacture directly or indirectly in or in relation to the manufacture of final products and clearance of final products from the place of removal. There is no dispute that the CHA services are required to facilitate clearance final products from the place of removal i.e. the load port."

For full text of judgment - please visit - 2008 -TMI - 31092 - CESTAT AHMEDABAD

While passing the judgment - CESTAT has relied upon the circular no. 97/8/2007 dated 23-8-2007 heavily.

Cenvat credit on CHA services: services up to the place of removal qualify as input service credit. Where sales are on FOB/CIF basis, the place of removal is the load port, and the definition of input service includes services rendered for outward transportation up to the place of removal and services used for clearance of final products; accordingly CHA services facilitating clearance to the load port fall within input services and are eligible for Cenvat credit, with reliance placed on an administrative circular interpreting input service scope.