2018 (11) TMI 1035 – CESTAT NEW DELHI – TMI – CENVAT Credit – input services – outward transportation charge under GTA service – place of removal – period January, 2005 to December, 2011 and July, 2013 to February, 2016 – Held that:- In view of changed definition of input service after April, 2008 the appellant is liable to pay service tax as per the prevalent rate only.
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Penalty – Held that:- The issue was mired in confusion and the issue was resolved only with the decision in the case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX VERSUS ULTRA TECH CEMENT LTD. [2018 (2) TMI 117 – SUPREME COURT OF INDIA] – thus this is not a fit case to impose penalty.
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Appeal allowed – decided in favor of appellant. – E/50161, 50421/2018-EX(DB) – Final Order No: 53303-53304/2018 – Dated:- 20-11-2018 – Mr. Bijay Kumar, Member (Technical) and Mr. Ajay sharma, Member (Judicial) Smt. Sukriti Das, Adv for the appellant Shri M.R.Sharma,(DR) for the respondent ORDER Per: Bijay Kumar 1. Both the ap
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are only factory gate /depot and not beyond that, and hence the Cenvat Credit availed on GTS service is not admissible as it does not qualifies as input service, defined under Rule 2 (l) of Cenvat Credit Rules, 2004. 4. In respect of Appeal No. E/50161/2018, this is the second round of litigation for period from January, 2005 to December 2011, and Appeal No. E/50421/2018, is a periodical demand on the same ground. The demands were confirmed after following the due process of law. 5. It is submitted by the Ld. Advocate that up to period March, 2008, the definition of input service contained the phrase from the place of removal . The Cenvat credit availability From place of removal has been settled in their favour in view of Hon ble Supreme Court order dated 17/1/2018 and 5/2/2018 in case of CCE vs. Vasavaddatta Cement Ltd., 2018(11) GSTL3 (SC) and in the case of CC, CE & ST, Guntur vs. The Andhra Sugar Ltd., 2018-TIOL-45-SC-CX. The definition of the input service during the relevant
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ot sustainable and liable to be set aside. 6. It was further submitted by the Ld. Advocate that accordingly to Ld. Advocate for the period from 1/4/2008 onward, the phrase from the place of removal has been substituted by phrase too upto to place of removal . Hon ble Supreme Court in the case of CCE & ST vs. Ultratech Cement Ltd. 2018 (9) GSTL 337 (S.C.) has held as under; 10. In the first instance, it needs to be kept in mind that Board‟s Circular dated August 23, 2007 was issued in clarification of the definition of input service‟ as existed on that date i.e. it related to unamended definition. Relevant portion of the said circular is as under : ISSUE : Up to what stage a manufacturer/consignor can take credit on the service tax paid on goods transport by road? COMMENTS: This issue has been examined in great detail by the CESTAT in the case of M/s. Gujarat Ambuja Cements Ltd. vs. CCE, Ludhiana [2007 (6) S.T.R. 249 (Tri-D)]. In this case, CESTAT has made the following
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se of M/s. Ultratech Cements Ltd v. CCE Bhavnagar – 2007-TOIL-429-CESTAT-AHM = 2007 (6) S.T.R. 364 (Tribunal), it was held that after the final products are cleared from the place of removal, there will be no scope of subsequent use of service to be treated as input. The above observations and views explain the scope of the relevant provisions clearly, correctly and in accordance with the legal provisions. In conclusion, a manufacturer/consignor can take credit on the Service Tax paid on outward transport of goods up to the place of removal and not beyond that. In this connection, the phrase place of 8.2 removal‟ needs determination taking into account the facts of an individual case and the applicable provisions. The phrase place of removal‟ has not been defined in CENVAT Credit Rules. In terms of sub-rule (t) of Rule 2 of the said rules, if any words or expressions are used in the CENVAT Credit Rules, 2004 and are not defined therein but are defined in the Central Excise
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e, or from a duty paid depot (from where the excisable goods are sold, after their clearance from the factory), the determination of the place of removal‟ does not pose much problem. However, there may be situations where the manufacturer /consignor may claim that the sale has taken place at the destination point because in terms of the sale contract/agreement (i) the ownership of goods and the property in the goods remained with the seller of the goods till the delivery of the goods in acceptable condition to the purchaser at his door step; (ii) the seller bore the risk of loss of or damage to the goods during transit to the destination; and (iii) the freight charges were an integral part of the price of goods. In such cases, the credit of the Service Tax paid on the transportation up to such place of sale would be admissible if it can be established by the claimant of such credit that the sale and the transfer of property in goods (in terms of the definition as under Section 2
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to be satisfied have to be in the context of upto‟ the place of removal. It is this amendment which has made the entire difference. That aspect is not dealt with in the said Board‟s circular, nor it could be. 12. Secondly, if such a circular is made applicable even in respect of post amendment cases, it would be violative of Rule 2(l) of Rules, 2004 and such a situation cannot be countenanced. 13. The upshot of the aforesaid discussion would be to hold 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. Accordingly, this appeal is allowed, judgment of the High Court is set aside and the Order-in-Original dated August 22, 2011 of the Assessing Officer is restored. 7. It was further contended while Ld. Advocate that the demand is not sustainable for period beyond normal period of limitation (one year) on the ground that there was wide spread confusion about t
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s admissible on fulfilment of conditions mentioned in the circular. 1 April 2008 Rule 2(l) of the Credit Rules, 2004 was amended and the phrase from the place of removal was substituted to upto the place of removal . 10 February 2009 Ambuja Cement Ltd. vs Union of India, 2009 (236) E.L.T. 431(P &H) The Hon ble Punjab and Haryana High Court overruled the decision in Gujrat Ambuja Cement(supra) 18 May 2009 ABB Ltd. vs. CCE, 2009 (15) S.T.R. 23(Tri-LB) The Larger Bench held that transportation of final product must be considered in light of the requirement of the business. 15 June 2009 The Department accepted the order of the Hon ble Punjab and Haryana High Court and decided not to file an SLP. 23 March 2011 CCE v. ABB Ltd., 2011(23) S.T.R.97(Kar.) The Hon ble High Court affirmed the decision of the larger bench in ABB (supra). 6 April 2011 CCE v. Parth Poly Woven Pvt. Ltd. 2012(25) S.T.R 4(Guj) The Hon ble Gujarat High Court held that transportation of finished goods is inextricably
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val 3 September 2014 Ultratech Cement Ltd. vs CCE, 2015(37) S.T.R. 364(Tri.-Del) Followed the previous order at 2014(35) S.T.R. 751(Tri.-Del.) 20 October 2014 The Department issed a circular which reiteratd the circular datd 23 August 2007, that the place where the sale takes place is the place of removal. 29 June, 2016 CCE v. Ultratech Cement Ltd., 2016(44) S.T.R. 227(Kar) The Hon ble High Court held that credit on FOR destination sales is admissible Appealed before SC (Civil Appeal No. 11261 of 2016) 17 January 2018 CCE, Belgaumn vs. Vasavadatta Cement Ltd., 2018(11)GSTL 3(SC) The Hon ble Supreme Court held that the credit would be admissible for the period prior to the amendment in 2008 -01 February 2018 CCE & ST vs. Ultratech Cement Ltd. 2018(9) GSTL 337(SC) The Hon ble Supreme Court held that credit is inadmissible for the period after the amendment in 2008 05 February 2018 Commissioner vs. The Andhra Sugar Ltd., 2018 TIOL 45 SC CX The Hon ble Supreme Court held that the credi
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