PRISM CEMENT LTD Versus CGST C.C & C. E-JABALPUR CGST C.E & C. C-BHOPAL
Central Excise
2018 (11) TMI 1035 – CESTAT NEW DELHI – TMI
CESTAT NEW DELHI – AT
Dated:- 20-11-2018
E/50161, 50421/2018-EX(DB) – Final Order No: 53303-53304/2018
Central Excise
Mr. Bijay Kumar, Member (Technical) and Mr. Ajay sharma, Member (Judicial)
Smt. Sukriti Das, Adv for the appellant
Shri M.R.Sharma,(DR) for the respondent
ORDER
Per: Bijay Kumar
1. Both the appeals are being disposed of by the common order as the issue involved in both the appeals are identical in nature
2. The appellant is in appeal against the impugned order where the Cenvat Credit has been denied to them towards outward transportation charge under GTA service for the period in January, 2005 to December, 2011 and July, 2013 to February, 2016.
3. The brief facts of the case are that the appellant is engaged in the manufacture of cement and clinker falling under chapter heading 25 of the First Schedule to the Cent
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up to period March, 2008, the definition of input service contained the phrase “from the place of removal”. The Cenvat credit availability “From place of removal” has been settled in their favour in view of Hon'ble Supreme Court order dated 17/1/2018 and 5/2/2018 in case of CCE vs. Vasavaddatta Cement Ltd., 2018(11) GSTL3 (SC) and in the case of CC, CE & ST, Guntur vs. The Andhra Sugar Ltd., 2018-TIOL-45-SC-CX.
The definition of the input service during the relevant period is reproduced as under;
(1) ” input service” means any service-
(i) used by a provider of taxable service for providing an input service, or
(ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal,
and includes services used in relation to setting up, modernization, renovation or repair of a factory, premises of provider of output service or an office relating to such factory or premises, adver
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definition of „input service‟ as existed on that date i.e. it related to unamended definition. Relevant portion of the said circular is as under :
“ISSUE : Up to what stage a manufacturer/consignor can take credit on the service tax paid on goods transport by road?
COMMENTS: This issue has been examined in great detail by the CESTAT in the case of M/s. Gujarat Ambuja Cements Ltd. vs. CCE, Ludhiana [2007 (6) S.T.R. 249 (Tri-D)]. In this case, CESTAT has made the following observations :-
“the post sale transport of manufactured goods is not an input for the manufacturer/consignor. The two clauses in the definition of „input services‟ take care to circumscribe input credit by stating that service used in relation to the clearance from the place of removal and service used for outward transportation upto the place of removal are to be treated as input service. The first clause does not mention transport service in particular. The second clause restricts transpor
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transport of goods up to the place of removal and not beyond that.
In this connection, the phrase „place of 8.2 removal‟ needs determination taking into account the facts of an individual case and the applicable provisions. The phrase „place of removal‟ has not been defined in CENVAT Credit Rules. In terms of sub-rule (t) of Rule 2 of the said rules, if any words or expressions are used in the CENVAT Credit Rules, 2004 and are not defined therein but are defined in the Central Excise Act, 1944 or the Finance Act, 1994, they shall have the same meaning for the CENVAT Credit Rules as assigned to them in those Acts. The phrase „place of removal‟ is defined under Section 4 of the Central Excise Act, 1944. It states that, –
“place of removal” means –
(i) a factory or any other place or premises of production or manufacture of the excisable goods;
(ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to
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e goods till the delivery of the goods in acceptable condition to the purchaser at his door step; (ii) the seller bore the risk of loss of or damage to the goods during transit to the destination; and (iii) the freight charges were an integral part of the price of goods. In such cases, the credit of the Service Tax paid on the transportation up to such place of sale would be admissible if it can be established by the claimant of such credit that the sale and the transfer of property in goods (in terms of the definition as under Section 2 of the Central Excise Act, 1944 as also in terms of the provisions under the Sale of Goods Act, 1930) occurred at the said place.”
11. As can be seen from the reading of the aforesaid portion of the circular, the issue was examined after keeping in mind judgments of CESTAT in Gujarat Ambuja Cement Ltd., 2007 (6) S.T.R. 249 (Tribunal) and M/s. Ultratech Cement Ltd., 2007 (6) S.T.R. 364 (Tri.- Ahd.). Those judgments, obviously, dealt with unamended Rule
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upshot of the aforesaid discussion would be to hold that Cenvat Credit on goods transport agency service availed for transport of goods from place of removal to buyer‟s premises was not admissible to the respondent. Accordingly, this appeal is allowed, judgment of the High Court is set aside and the Order-in-Original dated August 22, 2011 of the Assessing Officer is restored.
7. It was further contended while Ld. Advocate that the demand is not sustainable for period beyond normal period of limitation (one year) on the ground that there was wide spread confusion about the availability of Cenvat Credit on this score.
They have acted in accordance with the provision of the law as prevalent during the relevant time. The issue was contentious issue and which has resulted into the various conflicting judgements from the various judicial fora including High Courts and Supreme Court such as;
10 September 2004
The Cenvat Credit Rules, 2004 were brought into force vide Notification N
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upra)
18 May 2009
ABB Ltd. vs. CCE, 2009 (15) S.T.R. 23(Tri-LB)
The Larger Bench held that transportation of final product must be considered in light of the requirement of the business.
15 June 2009
The Department accepted the order of the Hon'ble Punjab and Haryana High Court and decided not to file an SLP.
23 March 2011
CCE v. ABB Ltd., 2011(23) S.T.R.97(Kar.)
The Hon'ble High Court affirmed the decision of the larger bench in ABB (supra).
6 April 2011
CCE v. Parth Poly Woven Pvt. Ltd. 2012(25) S.T.R 4(Guj)
The Hon'ble Gujarat High Court held that transportation of finished goods is inextricably linked with the manufactured process.
3 October 2012
Commissioner vs Grey Gold Cement Ltd., 2014(34) S.T.R. 809(A.P)
The Hon'ble Andhra Pradesh High Court affirmed the order of the larger bench in ABB ltd.
18 November 2012
Ultratech Cement Ltd. v. CCE, 2014(35) S.T.R. 752(Tri-Del.)
The Hon'ble Tribunal held that the Assessee would be entitled to credit if the sales
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ment Ltd., 2016(44) S.T.R. 227(Kar)
The Hon'ble High Court held that credit on FOR destination sales is admissible Appealed before SC (Civil Appeal No. 11261 of 2016)
17 January 2018
CCE, Belgaumn vs. Vasavadatta Cement Ltd., 2018(11)GSTL 3(SC)
The Hon'ble Supreme Court held that the credit would be admissible for the period prior to the amendment in 2008
-01 February 2018
CCE & ST vs. Ultratech Cement Ltd. 2018(9) GSTL 337(SC)
The Hon'ble Supreme Court held that credit is inadmissible for the period after the amendment in 2008
05 February 2018
Commissioner vs. The Andhra Sugar Ltd., 2018 TIOL 45 SC CX
The Hon'ble Supreme Court held that the credit would be admissible for the period prior to the amendment in 2008
8. Ld. Ld. Advocate further submitted that the various decisions of High Courts and Tribunal, were also in the favour of appellant, and therefore, in such a circumstances it cannot be held that the appellant had any malafide intention to avail the Cenva
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