By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
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Whether a place where goods are stored after
clearance from the factory on the payment of duty can be considered as
“place of removal” for the purpose of “input service” definition and
therefore whether CENVAT credit is allowed in respect of services
consumed at such place of removal? Held yes.
Facts:
Appellant
manufacturing sugar paid excise duty at the specific rate as per
section 4A of Central Excise Act, 1944 (CEA). Appellant cleared sugar
from the factory and stored the same at its place of storage at Agra and
Farukhabad. Appellant availed CENVAT credit of service tax paid in
respect of godown rent of Agra and Farukhabad, sugar handling charges
and security charges at these godowns, for insurance of sugar and cash,
vehicle hire charges, vehicle insurance etc. Respondent was of view that
since the services availed were after clearance of goods from the
factory, these cannot be qualified to be “input services” within the
meaning specified in Rule 2(l) of the CENVAT Credit Rules 2004 (CCR
Held:
Tribunal after referring to the definition of “input service” under the
said Rule 2(l) and after referring to the definition of “place of
removal” as defined under CEA held as under:
CCR does not define
the expression “place of removal”. However as per Rule 2(p) of the said
Rule, the terms defined in the CEA or Finance Act 1994 will apply for
the purpose of the said Rules.
Section 4(c) of CEA defines the
“Place of removal” to include a depot, premises of consignment agent or
any other place, or premises from where the excisable goods are to be
sold after their clearance from the factory. Therefore the said premises
are to be considered as “place of removal” as also affirmed by the
Tribunal in case of L.G. Electronics (India) Pvt. Ltd. vs. CCE 2010 (19)
STR 340 and by Punjab & Haryana High Court in case of Ambuja
Cements vs. UOI 2009 (14) STR 3 (P&H). The credit was thus allowed
for godown rent of Agra and Farukhabad. Credit in respect of other
expenses were allowed considering them relating to manufacturing
activity and supported by a number of High Court decisions.
