Manufacture and Clearance of Final Products upto Place of Removal are Treated as Input Services and are Eligible for CENVAT Credit of Service Tax: CESTAT [Read Order]
![Manufacture and Clearance of Final Products upto Place of Removal are Treated as Input Services and are Eligible for CENVAT Credit of Service Tax: CESTAT [Read Order]](https://www.taxscan.in/wp-content/uploads/2023/10/Manufacture-Clearance-of-Final-Products-Input-Services-CENVAT-Service-Tax-CESTAT-taxscan.jpg "Manufacture and Clearance of Final Products upto Place of Removal are Treated as Input Services and are Eligible for CENVAT Credit of Service Tax: CESTAT [Read Order]")
The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the manufacture and clearance of final products up to the place of removal are treated as input services and are eligible for CENVAT credit of Service Tax. JSW Steel Ltd, the appellant assessee was engaged in the business of ‘iron and steel products’ and, among the inputs...
The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the manufacture and clearance of final products up to the place of removal are treated as input services and are eligible for CENVAT credit of Service Tax.
JSW Steel Ltd, the appellant assessee was engaged in the business of ‘iron and steel products’ and, among the inputs services utilized by them had taken credit of tax discharged on ‘goods transport agency services deployed for the transportation of the finished products to the customers’ premises which thus claimed as on ‘free-on-rail’ (FOR) terms.
The assessee appealed against the order passed by the Commissioner of Central Excise for directing the recovery of Rs. 6,79,48,192/- under rule 14 of CENVAT Credit Rules(CCR), 2004 along with applicable interest, while imposing a penalty of like amount under rule 15 CENVAT Credit Rules.
Karthik Dedhia, the counsel for the assessee contended that the rule-making authority with effect from 1-4-2008 in Notification No. 10/2008 said that the expression “from the place of removal” was substituted by “up to the place of removal”. Thus from 1-4-2008, with the amendment, the CENVAT credit was available only up to the place of removal whereas as per the amended Rule from the place of removal had to be up to either the place of a depot or the place of the customer.
Xavier R Mascarenhas, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee was not eligible to avail of the CENVAT credit and the recovery was raised by the revenue as per the law and liable to be sustained.
The Bench observed that the services received or rendered by the manufacturer from the place of removal till it reaches its destination falls within the definition of input service. The two-member bench comprising Ajay Sharma (Judicial) and C J Mathew (Technical) held that the input services rendered by the manufacturers up to the place of removal are eligible for availing of CENVAT Credit.
To Read the full text of the Order CLICK HERE
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