Page 148 - DCOM308_DCOM502_INDIRECT_TAX_LAWS

Unit 8: Custom Duties

Notes
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Caselet ABB Ltd. v. CCEx. 2009 (15) S.T.R. 23 (Tri. - LB)

n the instant case, Revenue contended that in the inclusive clause of the definition of
"input service" under rule 2(l) of the CENVAT Credit Rules, 2004, it is specifically
Imentioned that only outward transportation up to the place of removal shall be
included. Therefore, credit for outward transportation from the place of removal to the
customer's place should not be allowed with reference to any other limb or category of the
definition of input service which is general in nature. However, the large Bench of the
Tribunal rejected the contention of the Revenue.
The Tribunal held that each of the limbs of the definition of "input services" is an independent
benefit/concession. If an assessee can satisfy any one of the above, then credit on input
service would be admissible even if the assessee does not satisfy the other limbs.
The expression "activities relating to business" admittedly covers transportation upto the
customers place and, therefore, credit cannot be denied by relying on specific coverage of
outward transportation upto the place of removal in the inclusive clause.
Revenue further alleged that since the cost of outward transportation did not form part of
the transaction value of the manufactured goods, any service tax paid for the outward
transportation of goods from place of removal could not be allowed as credit to the
manufacturer. In this regard the Tribunal clarified that for admissibility of credit for
outward transportation, there is no requirement that the cost of freight should enter into
the transaction value of the manufactured goods. The two issues, namely, 'valuation' and
'CENVAT credit' are independent of each other and have no relevance to each other.

Hence, it inferred that the services availed by a manufacturer for outward transportation
of final products from the place of removal should be treated as an input service and
thereby enabling the manufacturer to take credit of the service tax paid on the value of
such services.

Source: http://220.227.161.86/20925frpubcd_bos1.pdf

8.9 Summary

 The Customs Act was formulated in 1962 to prevent illegal imports and exports of goods.
 Duties of customs are levied on goods imported or exported from India at the rate specified
under the Customs Tariff Act.

 For the purpose of exercising proper surveillance over imports and exports,
 The Central Government has the power to notify the ports and airports for the unloading
of the imported goods and loading of the exported goods,

 The places for clearance of goods imported or to be exported, the routes by which above
goods may pass by land or inland water into or out of Indian and the ports which alone
shall be coastal ports.
 The different duties under custom duty in India include basic duty, additional duty
(countervailing duty), anti-dumping duty, protective duty, export duty.
 In bearing with the main objective of the customs duty, any goods which are imported or
attempted to be imported and exported or attempted to be exported, contrary to any

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