2018 (4) TMI 215

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.... are engaged in the manufacture of HDPE bags and PP bags falling under CSH 39232990 of CETA, 1985 and hold Central Excise registration. During the audit of the records of the unit, it was noticed by the department that the appellants had wrongly availed input service credit on the service tax paid on outward freight i.e. from the place of removal to the buyer premises. The department alleged that since duty was discharged at factory gate point, the fact gate becomes the 'place of removal' and the outward freight which is used for clearance of final products beyond the factory gate did not fall within the purview of definition of input service as per Rule 2(I) of CENVAT Credit Rules, 2004 (CCR) and hence input service credit availed ....

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.... the appellants are paying service tax on the transportation of goods from the factory gate to the depot or to the customers' premises as the case may be and is paying the service tax under Notification No.35/2004-ST dt. 03/12/2004 read with Rule 2(I)(d)(B)(v) of the Service Tax Rules, 1944. He further submitted that as per the definition of input service in Rule 2(l) of CENVAT Credit Rules, 2004 (CCR), outward transportation up to the place of removal falls under the definition of input service, He further submitted that the Commissioner(Appeals) failed to appreciate that as per the circular of the Board, the destination point i.e. the place of the buyer will be the place of removal if the following three conditions are satisified: ....