Case Law Details
CA Nischal Agarwal
CENVAT Credit of Service Tax paid on ‘Outward Transportation’ upto ‘Place of Removal’
Reliance in this connection can be placed on the decision of Hon’ble Chennai Tribunal in case of ITC Limited vs CCEx [Order No. 40353-40379/2016] wherein the basic question which came up for consideration was eligibility of CENVAT Credit of Service Tax paid on outward transportation of goods upto place of removal. In the instant case, the appellant was denied CENVAT Credit of service tax paid on outward transportation service by the revenue on the premise that such transportation charges are post clearance expenses and therefore cannot be considered as ‘Input Service’.
It would be pertinent to note that outward transportation upto place of removal is treated as ‘Input Service’ in terms with Rule 2(l) of CENVAT Credit Rules, 2004 and therefore eligible for CENVAT Credit. It is imperative to understand the meaning of place of removal for the purpose of understanding the eligibility of CENVAT Credit on such service. Place of removal is defined under Rule 2(qa) of CCR’04 and it is the place wherein property in goods passes to the buyer from the seller. Section 19 of Sale of Goods Act, 1930 provides that:
a) Where there is a contract of sale, the property in goods passes at such time as the parties to the contract intend it to be transferred
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