C&F agent Service is admissible input service

Last updated: 22 August 2022

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The CESTAT, Ahmedabad has ruled that Clearing and Forwarding (C&F) agent services are an admissible input service under the CENVAT Credit Rules, 2004. The tribunal found that services provided up to the place of removal, which facilitate the sale of goods on behalf of the appellant, are eligible for CENVAT credit. This decision overturns a previous dismissal by the Revenue Department.

Court :
CESTAT, Ahmedabad

Brief :
The CESTAT, Ahmedabad in M/s. NITCO LIMITED v C.C.E. & S.T.-DAMAN [Excise Appeal No.13016 of 2019] has held that the Clearing and Forwarding ("C&F") agent service is an admissible input service in the terms of Rule 2(l) of the CENVAT Credit Rules, 2004 ("the CENVAT Credit Rules").

Citation :
Excise Appeal No.13016 of 2019

The CESTAT, Ahmedabad in M/s. NITCO LIMITED v C.C.E. & S.T.-DAMAN[Excise Appeal No.13016 of 2019] has held that the Clearing and Forwarding ("C&F") agent service is an admissible input service in the terms of Rule 2(l) of the CENVAT Credit Rules, 2004 ("the CENVAT Credit Rules").

Facts:

M/s. NITCO LIMITED ("the Appellant") is engaged in providing services connected with the C&F operations.

The Appellant contended that, in respect of C&F Agent service, the service is provided upto at the place of removal. Therefore, as per the definition of "input service" provided under Rule 2(l) of the CENVAT Credit Rules, all the services upto the place of removal are admissible input service.

An appeal was preferred by the Appellant which was dismissed vide order ("the Impugned Order") by the Revenue Department ("the Respondent").

Being aggrieved by the ImpugnedOrder, the present appeal has been filed.

Issue:

Whether the Appellant is entitled for CENVAT Credit on C&F Agent Services?

Held:

The CESTAT, Ahmedabad inExcise Appeal No.13016 of 2019, held as under:

Observed that, the C&F Agent service is provided for sale of the goods take place on behalf of the Appellant. The sale of goods with the help of the C&F Agent service is treated as sale by the Appellant themselves, therefore, the C&F Agent services are received upto the place of removal.
Set aside the Impugned Order.
Held that, the C&F Agent Service is admissible input service.

FAQ :

The CESTAT, Ahmedabad has ruled that C&F agent services are an admissible input service for CENVAT credit purposes.

The admissibility of input services is governed by Rule 2(l) of the CENVAT Credit Rules, 2004.

They are considered admissible because the services are provided up to the place of removal, facilitating the sale of goods on behalf of the principal, and are treated as sales made by the principal themselves.

The CESTAT set aside the Impugned Order from the Revenue Department and held that C&F Agent services are admissible input services.

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Judgement posted by

Bimal Jain

Service

FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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