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22 Aug 2014

CENVAT Credit GTA Services (What would be the Place of Removal of Goods

Hon’ble High Court of Chhatisgarh, in a recent case of UltraTech Cement Ltd. Versus Commissioner of Central Excise, Raipur, AIT-2014-105-HC, held that place of removal can be gate of factory or the premises of consumer, as the case may be, depending upon the type of agreement. Thus, availability of CENVAT Credit will be determined accordingly i.e.-

In case the place of removal is the gate of factory, credit of GTA services used for transportation till that extent will be allowed.

In case the place of removal is the premises of consumer, credit of GTA services used for transportation till that extent will be allowed.

In the instant case, the appellant is a manufacturer of cement on which a specified rate of excise duty is charged. The appellant availed the credit of service tax paid on services of GTA for transporting the goods to the premises of customer, under the belief that the place of removal is the premises of consumer. The plea of the appellant was rejected on the grounds that in case of specified rate of duty, the place of removal is shifted to the gate of factory. The matter being now represented in the high court, it was observed that no provision of law or notification or circular explains such an intention of the government. Hence, in absence of such provision, there cannot be established a presumption of law.

The case was accordingly sent back to the tribunal to determine the place of removal of goods in accordance with the agreement, depending on which credit will be available.