Clarification regarding place of removal – reg.
Attention is invited to Circular No. Calvin Klein Boxer Hombre 988/12/2014-CX dated 20.10.2014 issued from F. No.
267/49/2013-CX.8 on the above subject wherein it was clarified that the place of removal needs
to be ascertained in terms of provisions of Central Excise Act, 1944 read with provisions of the
Sale of Goods Act, 1930 and that payment of transport, payment of insurance etc are not the
relevant considerations to ascertain the place of removal. The place where sale takes place or
when the property in goods passes from the seller to the buyer is the relevant consideration to
determine the place of removal.
2. In this regard, a demand has been raised by the trade that it may be clarified that in the
case of exports, for purposes of CENVAT credit of input services, the place of removal is the
port or the airport from where the goods are finally exported.
3. The matter has been examined. Ropa Interior Calvin Klein Mujer It is seen that section 23 of the Sale of Goods Act, 1930
provides that where, in pursuance of the contract, the seller delivers the goods to the buyer or to a
carrier or other bailee (whether named by the buyer or not) for the purpose of transmission to the
buyer, and does not reserve the right of disposal, he is deemed to have unconditionally
appropriated the goods to the contract, and therefore, in view of the provisions of the Section 23
(1) of the Sale of Goods Act, 1930, the property in the goods would thereupon pass to the buyer.
Similarly, section 39 of the Sale of Goods Act, 1930 provides that where, in pursuance of a
contract of sale, the seller is authorized or required to send the goods to the buyer, delivery of the
goods to a carrier, whether named by the buyer or not for the purpose of transmission to the buyer, or delivery of the goods to a wharfinger for safe custody, is prima facie deemed to be a
delivery of the goods to the buyer.
In most of the cases, therefore, it would appear that handing over of the goods to the
carrier/transporter for further delivery of the goods to the buyer, with the seller not reserving the
right of disposal of the goods, would lead to passing on of the property in goods from the seller
to the buyer and it is the factory gate or the warehouse or the depot of the manufacturer which
would be the place of removal since it is here that the goods are handed over to the transporter
for the purpose of transmission to the buyer. T Shirt Kenzo Homme It is in this backdrop that the eligibility to Cenvat
Credit on related input services has to determined.
5. Clearance of goods for exports from a factory can be of two types. The goods may be
exported by the manufacturer directly to his foreign buyer or the goods may be cleared from the
factory for export by a merchant exporter.
6. In the case of clearance of goods for export by manufacturer exporter, shipping bill is
filed by the manufacturer exporter and goods are handed over to the shipping line. Polo Philipp Plein After Let
Export Order is issued, it is the responsibility of the shipping line to ship the goods to the foreign
buyer with the exporter having no control over the goods. Calvin Klein Underwear Outlet In such a situation, transfer of property
can be said to have taken place at the port where the shipping bill is filed by the manufacturer
exporter and place of removal would be this Port/ICD/CFS. Needless to say, eligibility to
CENVAT Credit shall be determined accordingly.
7. In the case of export through merchant exporters, however, two transactions are involved.
First is the transaction between the manufacturer and the merchant exporter. The second
transaction is that between the merchant exporter and the foreign buyer. As far as Central Excise
provisions are concerned, the place of removal shall be the place where the property in the goods
passes from the manufacturer to the merchant exporter. As explained in paragraph 4 supra, in
most of the cases, this place would be the factory gate since it is here that the goods are
unconditionally appropriated to the contract in cases where the goods are sealed in the factory,
either by the Central Excise officer or by way of self-sealing with the manufacturer of export
goods taking the responsibility of sealing and certification, in terms of notification no. Boxer Calvin Klein Al Mayor 19/2004-
Central Excise (N.T.) dated 6.9.2004, etc.
8. Calvin Klein Bañadores However, in isolated cases, it may extend further also depending on the facts of the case,
but in no case, this
place can be beyond the Port/ ICD/CFS where shipping bill is filed by the
merchant exporter.