AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (6) TMI 576
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....pril 2014 of Commissioner of Central Excise (Appeals-I), Mumbai. 2. Appellant manufactures lubricating and other specialty oils at their factory situated at Wadibunder and transfers these on payment of duty to their central warehouse at Sewri for further distribution to their customers. The tax included by their clearing & forwarding agent, M/s Mepani Bros, in invoices raised on them and used for availing CENVAT credit between January 2007 and March 2009 which was disputed by the jurisdictional authorities on the ground that input service, as defined in rule 2(1) of CENVAT Credit Rules, 2004, are not available for expenses incurred beyond the place of removal. 3. Heard Learned Counsel for appellant and Learned Authorized Representativ....
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....s of the clearing and forwarding agency, it would appear that it is not necessary to rely upon this decision and the definition itself would suffice to determine whether the depot is the place of removal. It undoubtedly is. 5. CENVAT credit is the mechanics by which the cascading effects of taxation are eliminated. Necessarily, if tax paid on output has not excluded any cost of input/input service, then the tax availed on such input service should not be excluded from entitlement to CENVAT credit. Indeed, it would appear that reference to place of removal in rule 2(1) of CENVAT Credit Rules, 2004 is intended with that end in view. As the price of goods at the place of removal is subject to levy of excise duty, the objective of CENVAT cre....
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....ld be borne in mind that value added tax systems are designed to tax final consumption and as such, in most cases it is only consumers who should actually bear the tax burden. Indeed, the tax is levied, ultimately, on consumption and not on intermediate transactions between firms as tax charged on these purchases is, in principle, fully deductible. This feature gives the tax its main characteristic of neutrality in the value chain and towards International trade. CHAPTER-I BASIC PRINCIPLES I.A. INTRODUCTION l. There are many differences in the way value added taxes are implemented around the world and across OECD countries. Nevertheless, there are some common core features that can be described as follows: l. Valu....
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....odel of destination based consumption tax rule as is clear from the aforesaid clarifications issued by the CBEC as well as the law laid down by the Hon'ble Supreme Court in All India Federation of Tax Practitioner's case (supra). The basic approach adopted by India is to tax services on the destination cum consumption principle, which is in line with international norms. Therefore, OECD Guidelines can be safely considered. 37 A consumption tax derives its name from the fact that tax burden is ultimately borne by the final consumer and business does not bear the burden of the tax, since the business are allowed to take credit of tax paid on inputs supplied/received by them. If therefore Cenvat is denied to the input service received b....
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....ce of removal, procurement of inputs, (v) Services used in relation to activities relating to business and outward transportation upto the place of removal. Each limb of the definition of input service can be considered as an independent benefit or concession exemptions If an assessee can satisfy any one of the limbs of the above benefit, exemption or concession, then credit of the input service would be available. This would be so even if the assessee does not satisfy other limb/limbs of the above definition. To illustrate, input services used in relation to setting up, modernization, renovation or repairs of a factory will be allowed as credit, even if they are assumed as not an activity relating to business as long as they ar....