Navabharat Ventures Ltd Versus CCT, Visakhapatnam – GST
Central Excise
2018 (9) TMI 739 – CESTAT HYDERABAD – TMI
CESTAT HYDERABAD – AT
Dated:- 28-8-2018
Appeal Nos: E/31186/2017 & E/30055/2018 – A/31068-31069/2018
Central Excise
Mr. P. Venkata Subba Rao, Member (Technical)
Shri G. Prahlad, Advocate for the Appellant.
Shri Bhanu Kiran, Asst. Commissioner/AR for the Respondent.
ORDER
[Order per: P.V. Subba Rao.]
1. These two appeals involve a similar issue and are being disposed of together by a common order.
2. The appellant is a manufacturer of sugar and they stored sugar in godowns outside the factory premises, after paying duty on the same because the place in the factory was not sufficient. Thereafter the appellant had sold the sugar from these godowns. The godowns in question were hired by the appellant and service tax on renting of immovable property was paid on these godowns and appellant had taken credit of the same. Show Cause Notices were issued
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e of final products and clearance of final products “up to the place of removal”. It is to be decided whether the godowns in question are to be treated as places after the point of removal or they are the places of removal. According to the show cause notice the godowns are not part of the place of removal and the removal had already taken place as the duty has been paid before the goods were stored in these godowns. The original authority held that the use of input service must be integrally connected with the manufacture of final product and there must be nexus with the process of the manufacture. He held that in this case, the renting of immovable property services are utilized beyond the factory gate after removal of goods and does not qualify for entitlement of credit. He therefore confirmed the demand along with interest and also imposed a penalty under Rule 15(2) of the CENVAT Credit Rules, 2004 read with Sec.11AC of the Act. This position of the original authority was upheld by
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r factory and stored it in the depots from where the sugar was subsequently sold to the customers. Therefore, the godowns of their factory consequently fall under the definition of place of removal and hence, they are entitled to the credit of CENVAT credit on the service tax paid from renting of immovable property on these godowns. He relied on the following orders:
1) DSCL Sugar Vs CCE, Lucknow [ 2014-34-STR-58-Tri.-Delhi] in which it was held that the godowns of the appellant at Agra and Farrukhabad where the sugar was stored after payment of duty must be considered as place of removal.
2) Mark Exhaust Systems Ltd [2017-47-STR-167-Tri.-Delhi] in which it was held that motor vehicles manufactured and sold to buyer through the depots situated outside factory premises and the depots were treated as the place of removal.
3) Thiru Arooran Sugars Ltd [2017-3-GSTL-199-Tri.-Chennai] in which CENVAT credit was allowed on the godowns hired to store duty paid sugar outside the factory premi
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