M/S. Lipea Paramount Ltd vs Cst, Delhi-Iv

[Arising out of Order-in-Appeal No.50/CE/APPL/DLH-IV/2014 dated 30.04.2014 passed by the Commissioner of Central Excise (Appeals), Faridabad]

For approval and signature:

HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)

1. Whether Press reporters may be allowed to see the

order for publication as per Rule 27 of the CESTAT

(Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the

CESTAT (Procedure) Rules, 1982 for publication in

any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy

of the Order?

4. Whether Order is to be circulated to the Departmental

authorities?

__________________________________________________

M/s. Lipea Paramount Ltd. Appellant

Vs.

CST, Delhi-IV  Respondent

Present for the Appellant : Shri K.L.Handa, Consultant

Present for the Respondent: Shri G.R. Singh, DR

Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)

Date of Hearing/Decision: 04.06.2015

FINAL ORDER NO. 53288/2015

PER: S.K. MOHANTY

This appeal is directed against the impugned order dated 30.04.2014 passed by the Commissioner (Appeals), upholding denial of Cenvat credit in the adjudication order on the CHA and GTA services.

2. The brief facts of the case are that the appellant is engaged in the manufacture of PVC Profile, Rods, sticks and parts of refrigerator. The appellant avails cenvat credit of Central Excise duty and Service Tax paid on the inputs and input services, used in, or in relation to manufacture of final products, under the provisions of Cenvat Credit Rules, 2004. During the disputed period, Cenvat credit of service tax taken on the CHA Services and GTA services were denied to the appellant by the authorities below on the ground that such services are not related to the manufacture of the excisable goods and also not covered under the definition of input service.

3. I have heard the ld. Counsel for both the sides and perused the records.

4. The appellant is a manufacturer-exporter and exports the finished goods manufactured by it to different countries. The contract entered into between the appellant and the overseas buyers clearly provides that the terms of delivery is FOB - buyers country. In case of FOB sales, the ownership/title of the goods vests with the exporter till the same ultimately reaches the destination of the buyer. Hence, in such cases, the place of removal as defined in section 4 (3) (c) of the Central Excise Act, 1944 shall also include the port of despatch of the goods. In the present case, since the GTA services have been availed by the appellant for transportation of the goods from the factory to the port of export, such load port should be considered as the place of removal and the service tax paid on the GTA shall be eligible for cenvat credit in terms of the inclusive part of definition of input service as per Rule 2 (l) of the Cenvat Credit Rules, 2004. The CHA services are in relation to handling of the export consignment at the port of export. Hence, the said service also qualifies as an input service for Cenvat credit.

5. The issue regarding eligibility of cenvat credit on taxable services used for exportation of goods on FOB basis has been dealt with by the Honble Gujarat High Court in the case of Commissioner vs. Dinamic Industries Ltd., reported in 2014 (307) ELT 15 (Guj), wherein it has been held that where exports are on FOB basis, place of removal is port of export and the services availed till the goods reach the port, shall be admissible for the purpose of cenvat credit.

6. In view of above, I do not find any merits in the impugned order, and thus, the same is set aside and the appeal is allowed in favour of the appellant.

(Dictated and pronounced in the open Court)

(S.K. MOHANTY)

MEMBER (JUDICIAL)

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