2018 (7) TMI 910

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..... A Show Cause Notice was issued for disallowing credit of Service Tax on GTA service under Rule 14 of CENVAT Credit Rules, 2004 along with interest and for imposing penalty. The Adjudicating Authority dropped the proceedings initiated vide Show Cause Notice (C. No. V(15)18-CE/Kol- IV/Adjn/Commr/2008/7184-D, dated 01.12.09). Hence, the Revenue is in appeal before the Tribunal. 3. The Ld. DR reiterates the grounds of the appeal and prays for allowing the appeal. 4. Heard the Ld. D.R. for the Revenue and perused the appeal records. The period of dispute in the present appeal is from April, 2006 to March, 2008. The issues to be decided in this appeal are as under:- (i) CENVAT Credit availed on Service tax paid on outward freight for export of goods from factory to the port. (ii) CENVAT Credit availed on Service Tax paid on outward transportation of goods by road upto the destination of their customer after sale from factory gate. 5. We find that the assessee was required to send their finished excisable goods through transport agency up to the destination of their customers as well as port of export, and have taken credit of Service Tax paid on such cost of transportati....

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....ion charges. Because, after the final products has reached the place of removal, to clear the final products nothing more needs to be done, except transporting the said final products to the ultimate destination i.e. the customer's/buyer of the said product, apart from attending to certain ancillary services as mentioned above which ensures proper delivery of the finished product upto the customer. Therefore, all such services rendered by the manufacturer are included in the definition of 'input service'. However, as the legislature has chosen to use the word 'means' in this portion of the definition, it has to be construed strictly and in a restrictive manner. After defining the 'input service' used by the manufacturer in a restrictive manner, in the later portion of the definition, the legislature has used the word 'includes '. Therefore, the later portion of the definition has to be construed strictly and in a restrictive manner. After defining the 'input service' used by the manufacturer in a restrictive manner, in the later portion of the definition, the legislature has chosen to use the word 'includes'. Therefore, the later portion of the definition has to be construed libera....

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....al products and clearance of final products from the place of removal, and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation from the place of removal; The phrase 'place of removal' is defined under Section 4 of the Central Excise Act, 1944. It states that - 'place of removal' means, - (i) a factory or any other place or premises of production or manufacture of the excisable goods; (ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be stored without payment of duty; (iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clear....

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....rt of manufactured goods is not an input for the manufacturer/consignor. The two clauses in the definition of 'input services' take care to circumscribe input credit by stating that service used in relation to the clearance from the place of removal and service used for outward transportation upto the place of removal are to be treated as input service. The first clause does not mention transport service in particular. The second clause restricts transport service credit upto the place of removal. When these two clauses are read together, it becomes clear that transport service credit cannot go beyond transport upto the place of removal. The two clauses, the one dealing with general provision and other dealing with a specific item, are not to be read disjunctively so as to bring about conflict to defeat the laws' scheme. The purpose of interpretation is to find harmony and reconciliation among the various provisions". Similarly, in the case of M/s. Ultratech Cements Ltd. v. CCE, Bhavnagar -2007-TIOL-429-CESTAT-AHM, it was held that after the final products are cleared from the place of removal, there will be no scope of subsequent use of service to be treated as input. The above....