The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that cenvat credit can be availed when input and input services received up to place of removal of manufactured goods.
The appellant is engaged in manufacture of ceramic tiles following under Central Excise Tariff heading 6908 9090. The assessee was also availing the benefit of the Cenvat Credit of duty paid on input and capital goods as well as input services as per the provisions of Cenvat Credit Rules, 2004.
During the audit of the financial record of the appellant it was observed by the officers that they have availed Cenvat Credit of Service Tax paid on clearing and forwarding service received by them at the depot on the strength of invoices / vouchers issued by their head office having Input Service Distributor (ISD) registration.
The counsel for the appellant contended that since, the ultimate sale of the product has taken place from the depot maintained by their consignment agents on their behalf and therefore, the place of removal of the excisable goods get extended to the place of depot of the consignment agent maintained on behalf of the appellant as the place of removal and therefore, all input services availed by them up to depot sale becomes input services and as per the provisions of the CENVAT Credit Rules, 2004 they are entitled for CENVAT Credit of the services availed by them up to depot which is in fact the place of removal.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “It can be seen from the above definition of the place of removal that if the goods are actually sold to an independent buyer from depot of the consignment agent, the place of removal of the excisable goods will be such premises of the consignment agent or depot of the manufacturer. We are of the view that since all the cost incurred up to the place of removal will be integral part of the price and therefore, all the input and input services which are received up to the place of removal of the manufactured goods, the assessee becomes entitled for credit of the same as per the provisions of the CENVAT Credit Rules.”
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