TaxTMI 
TaxTMI 
2019 (4) TMI 1347
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....d CENVAT Credit of Service Tax paid on 'container services' received from M/s. CONCOR for use in outward transportation of their final product i.e. Sponge Iron upto the place of buyers and claimed CENVAT Credit of the service tax levied thereon as input service within the meaning of Rule 2(l). Show Cause Notice dated 19.03.2009 was issued alleging that the service in question do not qualify to be an "Input Service", in view of the definition of "Input Service" as provided in the CENVAT Credit Rules, 2004. The Adjudicating Authority passed the following order:- "In view of the abovementioned facts and circumstances I hereby order recovery of the Cenvat Credit availed by M/s. T.R. Chemicals., At - Unit -III, P.O. Bamara, Dist-Sambalpur (ORISSA), amounting to Rs. 2,73,160/- [i.e. Service Tax Rs. 2,65,093/- +Edn. Cess Rs. 5,352/- + Secondary and Higher Secondary Edn. Cess Rs. 2,715/-] involved on the out-ward transportation of their final product (i.e. Sponge Iron) from their factory as demanded vide the Demand-Show Cause Notice C No. V(72)3/ADJN/SBP-1/09/2009/693-694 Dt. 19.03.2009 along with interest due thereon at appropriate rate from them under Rule 14 of the Cenvat Cr....
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.... "2(l) "input service" means any service :- (i) Used by a provider of taxable service for providing an output services; or (ii) Used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto 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 upto the place of removal;" 6. It is an admitted position that the instant case does not fall in sub-clause (i) and the issue is to be decided on the application of sub-clause (ii). Reading of the aforesaid provision makes it clear that those services are included which are used by the manufacture....
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....s 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 services 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. Credit availability is in regard to 15. 'inputs'. The credit covers duty paid on input materials as well as tax paid on services, used in or in relation to the manufacture of the 'final product'. The final products, manufactured by the assessee in their factory premises and once the final products are fully manufactured and cleared from the factory premises, the question of utilization of service does not arise as such services cannot be considered as used in relation to the manufacture of the final product. Therefore, extending the credit beyond the point of removal of the final product on payment of duty would be contrary to ....
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....input service' as existed on that date i.e. it related to unamended definition. Relevant portion of the said circular is as under : "ISSUE : Up to what stage a manufacturer/consignor can take credit on the service tax paid on goods transport by road? COMMENTS: This issue has been examined in great detail by the CESTAT in the case of M/s. Gujarat Ambuja Cements Ltd. vs. CCE, Ludhiana [2007 (6) S.T.R. 249 (Tri-D)]. In this case, CESTAT has made the following observations :- "the post sale transport 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 dea....
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....re sold, after their clearance from the factory), the determination of the 'place of removal' does not pose much problem. However, there may be situations where the manufacturer /consignor may claim that the sale has taken place at the destination point because in terms of the sale contract/agreement (i) the ownership of goods and the property in the goods remained with the seller of the goods till the delivery of the goods in acceptable condition to the purchaser at his door step; (ii) the seller bore the risk of loss of or damage to the goods during transit to the destination; and (iii) the freight charges were an integral part of the price of goods. In such cases, the credit of the Service Tax paid on the transportation up to such place of sale would be admissible if it can be established by the claimant of such credit that the sale and the transfer of property in goods (in terms of the definition as under Section 2 of the Central Excise Act, 1944 as also in terms of the provisions under the Sale of Goods Act, 1930) occurred at the said place." 11.As can be seen from the reading of the aforesaid portion of the circular, the issue was examined after keeping in mind judgm....