TaxTMI 
TaxTMI 
2007 (8) TMI 501
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....o. Appellant v. Respondent Reversal of Credit or Payment of duty & Interest Penalty ST/345/2006 The India Cements Limited v. The Commissioner of Central Excise, Tirupati Rs. 74,97,087/- under Rule 14 of Cenvat Credit Rules, 2004 read with sub-section (1) of Section 11A of the Central Excise Act, 1944 and also demand of interest under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11AB of the Central Excise Rules, 2004 Rs. 10,000/-under sub-rule (3) of Rule 15 of the Cenvat Credit Rules, 2004 ST/347/2006 M/s. Zuari Cement Pt. Ltd. v. The Commissioner of Central Excise, Tirupati. Rs. 12,76,481/- under Rule 14 of Cenvat Credit Rules, 2004 read with sub-section (1) of Section 11A of the Central Excis....
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....m either from the factory or from the depot. When the finished goods are cleared from the factory, the factory is place of removal. In several cases, the finished goods are transferred to the depots and the final products are removed from the depots. In such cases, the depots become the place of removal. Now the question is whether the services of the goods transport operator to transport the final products from the place of removal can be treated as 'Input Service' in terms of Rule 2(1)(ii) of Cenvat Credit Rules, 2004. All these appellants have availed the Cenvat Credit of the Service Tax paid on the goods transport services availed by them. The point at issue is whether they are entitled for taking credit on the outward transportation of....
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.... a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage up to the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and qualitative control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal. 4.1 The learned advocates argued that in the above Rule, the sub-rule (ii) relates to the 'Input Service' with which we are concerned. From the above sub-rule, it is very clear that service used by a manufacture whether directl....
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....e credit of outward transportation only upto the place of removal forgetting or ignoring the first limb of the definition of 'Input Service' in Rule 2(1)(ii). In other words, whatever outward transportation is used and if the Service tax is paid on the goods transport services availed for such outward transportation, then the manufacturer is not entitled for such credit. According to Revenue, as far as outward transportation is concerned the credit is limited to the tax paid on outward transportation upto the place of removal. In our view, the interpretation placed by the Revenue is not correct. Both the limbs of the definition of 'Input Service' have to be harmoniously interpreted. For interpreting the provisions harmoniously, we should be....
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....anufacturer in relation to clearance of final products from the place of removal. In such circumstances, this service viz., the 'outward transportation' from the place of removal becomes an 'Input Service' as far as the manufacturer is concerned. Once it is an 'input service', then automatically, the appellant is entitled for the credits. We want to show that these interpretations in no way conflict with the inclusive definition [second limb] where the outward transportation is limited upto the place of removal. This can be explained like this. When the depot is the place of removal that is actually before the removal of the final products from the depot, the goods are brought from the factory to the depot, as far as the factory is concerne....
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....an 'Input Service'. In other words, the outward transportation of the final products from the factory is an 'Input Service' and outward transportation of the final product from the depot is an 'Input Service'. Once these services are defined as 'Input Service', the credit cannot be denied. As regards the outward transportation of the final products from the factory to the depot is concerned, it is defined as 'Input Service' in view of the inclusive definition which reads as "outward transportation upto the place of removal". Once outward transportation upto the place of removal is defined as an 'Input Service' the credit has to be given. Therefore, what is to be understood and appreciated is the inclusive definition cannot limit the scope o....