2018 (10) TMI 829 – RAJASTHAN HIGH COURT – TMI – CENVAT credit – input services or not – Goods Transport Agency Services in respect of which the assessee had availed the Cenvat credit of service tax during the period from July, 2014 to March, 2015 for outward transportation of cement – place of removal – Held that:- In view of the amended definition of “input service” w.e.f. 01.03.2008 as also in the light of judgment of the Supreme Court in Ultra Tech Cement Ltd. [2018 (2) TMI 117 – SUPREME COURT OF INDIA], judgment of the Tribunal cannot be sustained in law and the demand is liable to be revived – It was held by the Supreme Court 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.
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The matter is remanded back to the Tribunal for consideration of the question of penalty to decide the same after hearing both the parties in accordance with law – appeal allowed by way of
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are eligible input services within the meaning of input service and whether upon determination of the phrase i.e. place of removal defined under Cenvat Credit Rules, 2004, the assessee had availed the Cenvat Credit on the GTA service correctly or not? The respondent-assessee is manufacturer of cement classifiable under Chapter 25 of the Central Excise Tariff Act, 1985. Upon perusal of the assessee s record, it was noticed that for the period from July, 2014 to March, 2015, the respondent-assessee availed CENVAT Credit of service tax paid by it towards Goods Transport Agency Services (for short GTA Services ), from factory to customers, from railway siding to godown and from godown to customers, amounting to ₹ 1,24,75,315/-. It appeared that these services were not covered under the definition of input service under the provisions of Rule 2(l) of the CENVAT Credit Rules, 2004 (for short the Rules of 2004 ). Therefore, a show cause notice dated 28.07.2015 was issued to the responde
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y Notification No. 10/2008-CE(NT), dated 01.03.2008 by substituting the same with the words, clearance of final products upto the place of removal . Thus, if any ambiguity, which was there in respect of GTA Services upto the place of removal, the same has already been removed by the Government and therefore, the aforesaid services taken upto the place of removal can only be covered under the definition of input service . The Tribunal has failed to notice this change in the definition while deciding the appeal of the assessee, while judgment has been given in the context of earlier definition of input service . Reference to definition of place of removal in Section 4(3)(c) of the Act of 1944 was also given. Since the present matter was covered by the aforesaid notification, the Tribunal was wholly unjustified in allowing the appeal filed by the assessee. Learned counsel argued that since the question raised in the present case is squarely covered by the judgment of the Supreme Court in
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decided the issue against the Revenue not only in this matter but also in the matter arising out of previous assessment year wherein the main demand was set aside, the question of penalty would therefore not arise for consideration. Learned counsel argued that as per the law that was prevalent at the time when the Tribunal passed the impugned judgment, the respondent-assessee was not required to satisfy the demand and acted throughout that impression, therefore, there was no question of any penalty to be paid on that. Mr. Siddharth Ranka, learned counsel for the appellant rejoined and submitted that the penalty is consequential as the issue raised in this matter is squarely covered by the judgment of the Supreme Court. In case the judgment of the Tribunal is set aside and demand is revived, the penalty imposed by the Adjudicating Authority is also liable to be restored. Learned counsel submitted that the submission of the respondent that the Supreme Court in Ultra Tech Cement Ltd. (su
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