M/s. Alkraft Thermotechnologies Pvt. Ltd. Versus Commissioner of GST & Central Excise
Central Excise
2018 (7) TMI 686 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 9-7-2018
Appeal Nos. E/40311 to 40313/2018 – Final Order Nos. 41949-41951 / 2018
Central Excise
Hon'ble Ms. Sulekha Beevi C.S., Member ( Judicial )
Shri R. Anish Kumar, Advocate for the Appellant
Shri S. Govindarajan, AC (AR) for the Respondent
ORDER
The issue in all these appeals being same, they were heard together and are disposed by this common order.
2. Brief facts are that the appellants are manufacturers of radiators and parts and are availing the facility of CENVAT credit of duty paid on inputs and service tax paid for input services. On verification of records, it was noticed that during the periods September 2009 to February, 2010 and October 2014 to April 2015, May 2015 to February 2016, the appellant had availed CENVAT credit on outward transportation of goods for the goods cleared
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In terms of Rule 2(qa) of CENVAT Credit Rules, 2004 also the 'place of removal' means a factory or any other place or premises of production or manufacture of the excisable goods. The place of removal is required to be determined with reference to 'point of sale'. In the case of stock transfer, the entire goods are transferred to the other manufacturing unit of the appellant and therefore at the factory gate no sale takes place. Thus, in the case when the goods are stock transferred to their own unit for further manufacture, the place of removal cannot be considered as the factory gate. Only if there is a sale, the said point can be considered as a place of removal. To support his argument, he relied upon the judgment of the Hon'ble Supreme Court in the case of Commissioner Vs. Roofit Industries Ltd. – 2015 (319) ELT 221 (SC). The Board Circular No. 1065/4/2018-CX dated 8.6.2018 was also relied by the ld. counsel for the appellant. He further took assistance of the decision of the Tri
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ble goods are to be sold after their clearance from the factory;]
from where such goods are removed”.
Input services after 1.4.2008
'Input service” means,-
(i) services provided or agreed to be provided by a person located in non-taxable territory to a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India where service tax is paid by the manufacturer or the provider of output service being importer of goods as the person liable for paying service tax for the said taxable services and the said imported goods are his inputs or capital goods; or
(ii) any service used by a provider of output service for providing an output service; or
(iii) any service used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal,
and includes services used in relation to modernisati
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sion of one or more of the specified services; or]
[(B) [services provided by way of renting of a motor vehicle], in so far as they relate to a motor vehicle which is not a capital goods”
7. With effect from 1.4.2008, in the definition of input services the words 'upto the place of removal' has been substituted instead of 'from the place of removal'. The ld. counsel has strenuously argued that since there is no sale of goods from the factory gate when the goods are stock transferred to their own unit for further manufacture, the factory gate cannot be considered as place of removal. According to him, Section 4(3)(c) of Central Excise Act, 1944, uses the word 'place of removal' as the place from where the goods are sold. In the appellant's case, the intermediate goods are removed on payment of excise duty on the basis of CAS-4 for further manufacture to their sister unit. It is thus argued that though goods are removed on payment of duty to their sister unit, it does not amount to sa
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t it is admittedly not clearance for sale of the goods. In terms of Section 4(3)(c) of Central Excise Act, 1944, definition of place of removal is as under :
'Place of removal' means :-
(i) a factory or any other place or premises of production or manufacture of excisable goods;
(ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty;
(iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearances from their factory.
from where such goods are removed.”
From the above definition, it is clear that where the goods is cleared from factory, but place of removal is determined only a place, where the goods is sold. In case goods is sold from factory, the factory gate is considered as place of removal but though the clearances is made from the factory but goods is not sold from factory, but sold at any other place after r
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rved that credit of service tax paid on transportation of clinker to their sister unit is admissible as there is no case of sale and transfer of property in goods at the factory gate. The relevant portion is as follows:-
“6. After careful consideration of the facts, the submissions of both the sides and the case laws cited, it appears that the facts do not involve any sale of the goods in question. The goods viz. clinker is to be transported from party's premises to their sister unit premises and the respondent viz. Lafarge India Pvt. Ltd. is not taking any consideration for the same as Jojobera unit being their sister unit. It is clear that the definition 'place of removal' is inextricably linked with the fact of 'sale'. When present facts do not involve any sale, one cannot say that the factory premises of the appellant is the 'place of removal'. Therefore, the Revenue's contention that Cenvat credit cannot be allowed on account of transportation services used for transportation of
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expression 'from the place of removal'. As per the said definition, service used by the manufacturer of clearance of final products 'from the place of removal' to the warehouse or customer's place etc., was exigible for Cenvat Credit. This stands finally decided in Civil Appeal No. 11710 of 2016 (Commissioner of Central Excise Belgaum v. M/s. Vasavadatta Cements Ltd.) vide judgment dated January 17, 2018. However, vide amendment carried out in the aforesaid Rules in the year 2008, which became effective from March 1, 2008, the word 'from' is replaced by the word 'upto'. Thus, it is only 'upto the place of removal' that service is treated as input service. This amendment has changed the entire scenario. The benefit which was admissible even beyond the place of removal now gets terminated at the place of removal and doors to the Cenvat credit of input tax paid gets closed at that place. This credit cannot travel therefrom. It becomes clear from the bare reading of this amended Rule, whi
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