M/s. HCL Infosystems Ltd. Unit – III Versus Commissioner of GST & CCE, Pondicherry
Central Excise
2018 (6) TMI 247 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 4-6-2018
Appeal Nos. E/42620 & 42621/2017 – Final Order No. 41725-41726 / 2018
Central Excise
Hon'ble Ms. Sulekha Beevi C.S., Member ( Judicial )
Ms. S. Yogalakshmi, Advocate for the Appellant
Shri K. P. Muralidharan, AC (AR) for the Respondent.
ORDER
The issue involved in both these appeals being the same, they were heard together and are disposed of by this common order.
2. Brief facts are that the appellants are manufacturers of computer systems and were availing the facility of Cenvat Credit of duty paid on inputs, capital goods and services tax paid on input services. On verification of records, it was noticed that during the period from April 2012 to September 2012, as well as October 2012 to March 2013, the appellants had availed Cenvat Credit on outward transportation of goods up to the bu
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ctual credit availed by the appellant pertains to service tax paid on 25% of the gross amount of the freight charge incurred, whereas the appellant had paid the excise duty at the rate of 10% on the assessable value of the final goods, which is inclusive of the entire freight charge incurred. Thus, the credit availed in respect of the freight incurred is very meagre when compared to the excise duty paid on the assessable value. The department had insisted to add the freight value to the assessable value for the payment of excise duty treating the place of the client as the place of removal. Whereas, thereafter, the department has not accepted the customer's place, as the place of removal in order to deny the Cenvat Credit availed on the outward freight incurred. She submitted that as the excise duty paid on the assessable value, being at a relatively high rate, the denial of Cenvat Credit availed on service tax paid on 25% of the gross amount on reverse charge mechanism is a clear case
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e of removal, read with outward transportation up to the place of removal, would lead to the meaning of the term “place of removal”, as stated in respect of transportation services availed up to such “place of removal”. She adverted to the definition of “place of removal” contained in Section 4 (3) (c) of Central Excise Act, 1944, and also referred to Master Circular No. 97/8/2007 dated 23.08.2007. Relying on the decision in the case of M/s. Ultratech Cement Ltd. Vs. CCE 007 (6) STR 364 (Tribunal), the learned Counsel argued that the crux of the clarification given by the Board is as to the scope of the term “place of removal”. Once, the term “place of removal” is thus understood, Cenvat Credit is eligible for transportation up to the place of removal. If buyer's premises can be considered as place of removal, then credit for GTA services up to buyer's place is also eligible. Further, that since the clarification as per the decisions as well as the Master Circular has not overcome the
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ent. The Circular only clarifies that the buyer's place can become place of removal if the three conditions are satisfied. If these three conditions are satisfied, the place of removal would be the buyer's place up to 31.03.2008 and credit would be eligible. After 01.04.2008, credit is not eligible for clearance of final products up to the place of removal and the GTA services availed for transporting the goods from the factory or depot to the buyer's place could be covered within the expression for clearance of final products up to the place of removal, if otherwise, the buyer's place can be considered as the place of removal. That, therefore, the conclusion of the Hon'ble Apex Court in the said clarification is not relevant after 01.04.2008, as it appears to be incorrect. That the judgement of the Hon'ble Apex Court does not deal with these issues and, therefore, does not cover the issue under consideration. She prayed that the credit on the service tax, paid on outward transportatio
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