Port will be considered as ‘place of removal’ in cases of Export

The Gujarat High Court in the case of Cen­tral Excise v Induc­totherm India P. Ltd. 2014 (36) STR 994 (Guj.) has held that Cen­vat cred­it in respect of input ser­vices availed under the cat­e­go­ry of Car­go Han­dling Ser­vices is allowed as the same is inclu­sive in the def­i­n­i­tion of ‘input service’.

In the present case, the Appel­lant is engaged in man­u­fac­tur­ing of Induc­tion Melt­ing and Heat­ing Fur­nace, Induc­tion Weld­ing equipment’s and Spare parts which are clas­si­fi­able under Chap­ter Head­ing 8514, 8515 and 8454 of the Sched­ule to the Cen­tral Excise Tar­iff Act, 1985 and is avail­ing the car­go han­dling ser­vices for the clear­ance of final prod­uct from the port for the pur­pose of export under Cen­vat Cred­it Rules, 2004.

The High Court held that in the present case ‘input ser­vice’ has to be inter­pret­ed in light of the require­ment of busi­ness and can­not be read restric­tive­ly so as to con­fine ‘place of removal’ only up to the fac­to­ry gate or only up to depot of man­u­fac­tur­ers and accord­ing­ly any ser­vices availed by the exporters until the goods left India from the port are the ser­vices used in rela­tion to clear­ance of final prod­ucts up to place of removal.

There­fore, Cen­vat cred­it of car­go han­dling ser­vices will be allowed as the same has been uti­lized for the pur­pose of export where the place of removal will be con­sid­ered to be the port.

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