2018 (6) TMI 247 – CESTAT CHENNAI – TMI – GTA Service – CENVAT credit – input services – Outward transportation of goods up to the buyer’s premises – period involved is after 01.04.2008 – whether the appellant is eligible to avail the Cenvat Credit of service tax paid on the GTA service received by them for outward transportation of final products from the factory gate up to the premises of the buyer when the sales are on FOR basis? – penalty.
–
Held that:- The said issue has been decided in the case of M/s. Ultratech Cement Ltd. [2018 (2) TMI 117 – SUPREME COURT OF INDIA] by the Hon’ble Apex Court, wherein it has been held that credit is eligible up to 01.04.2008 and after such date, the assessee is not eligible for credit – credit not allowed.
–
Penalty – Held that:- Taking into consideration that the issue was under litigation and was in favour of assessee at the Tribunal level as also decided by various High Courts and got settled only by the decision of the Hon’ble Apex C
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
e, show-cause notices were issued, proposing to recover the wrongly availed credit along with interest and for imposing penalties. After due process of law, the original authority confirmed the demand, interest and penalties. In appeal, the Commissioner (Appeals) upheld the same. Hence, these appeals. 3. On behalf of the appellant, the learned Counsel Ms. S. Yogalakshmi submitted that the appellants had sold the manufactured products on FOR (Destination) basis, as the appellant had an obligation to deliver the goods at the customer s premises and the ownership of the said goods got transferred to their client only at that stage. The price quoted to their clients is inclusive of the freight charge incurred by the appellant for the outward transportation. The appellant had paid excise duty on the assessable value, which is inclusive of the freight charges thus incurred. It is submitted that the actual credit availed by the appellant pertains to service tax paid on 25% of the gross amount
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
th effect from 01.04.2008, an amendment has been made by notification 10/2008 CE NT dated 01.03.2008, wherein the words clearance of final products from the place of removal , is substituted with the words clearance of final products up to the place of removal . For the period prior to the above amendment, the issue is settled by the judgement in the case of CCE Vs. ABB Ltd., {2011 (23)STR 97 Kar.}. It was held therein that the expression clearance of the final products from the place of removal would cover such transportation services up to the customer s place, and the same cannot be restricted by the expression outward transportation up to the place of removal . The judgement has also made it clear that the position post 01.04.2008 is not examined. Hence, when the definition has been amended from 01.04.2008, restricting the credit entitled for clearance of final products up to the place of removal, read with outward transportation up to the place of removal, would lead to the meanin
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
sportation, the CBEC came out with another Circular No. 988/12/2014 dated 20.10.2014. The Circular clarified that the place where sale has taken place or when the property, in goods, passes from the seller to the buyer, is the relevant consideration to determine the place of removal. The effect of the above Circulars is that if the transfer of property in the goods happens to be at the buyer s place, in terms of the provisions of the Sale of Goods Act, 1930, then such buyer s place would be the place of removal, and, hence, any service tax paid on GTA services availed for transporting the goods till the buyer s premises would be eligible for Cenvat Credit. 5. That, while this being so, it is submitted by her that the Hon ble Apex Court in the case of Ultratech Cement Ltd. (supra) has not noticed that the clarification contained in the Circular has got nothing to do with the amendment. The Circular only clarifies that the buyer s place can become place of removal if the three conditions
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
R, Shri K.P. Muralidharan, supported the findings in the impugned order. He submitted that the issue stands settled by the decision in the case of M/s. Ultratech Cement Ltd. 2018-TIOL-42 SC-CX. 7. Heard both sides. 8. The period involved is after 01.04.2008. The issue involved in both the appeals is whether the appellant is eligible to avail the Cenvat Credit of service tax paid on the GTA service received by them for outward transportation of final products from the factory gate up to the premises of the buyer when the sales are on FOR basis. The said issue has been decided in the case of M/s. Ultratech Cement Ltd. by the Hon ble Apex Court, wherein it has been held that credit is eligible up to 01.04.2008 and after such date, the assessee is not eligible for credit. Though the learned Counsel for appellant has put forward lengthy arguments in the written submissions, I am afraid the same does not find any merit in view of the decision of the Hon ble Apex Court in the case cited supra
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =