2018 (12) TMI 864 – CESTAT KOLKATA – TMI – CENVAT credit – freight for outward transportation of goods from their factory to the buyer’s premises – demand alongwith interest and penalty – Held that:- The issue is no more res-entigra in view of the decision of the Hon’ble Supreme Court of India in the case of Commissioner of Central Excise, Belgaum Vs. Vasavadatta Cement Ltd. [2018 (3) TMI 993 – SUPREME COURT], where it was held that From 01.04.2008, with the aforesaid amendment, the CENVAT credit is available only upto the place of removal whereas as per the amended Rule from the place of removal which has to be upto either the place of depot or the place of customer, as the case may be – credit allowed – appeal allowed – decided in favor of appellant. – Appeal Nos. ST/77288/2018 & ST/78059/2018 – FO/76596-76597/2018 – Dated:- 10-9-2018 – SHRI P.K. CHOUDHARY, MEMBER (JUDICIAL) Shri S. P. Majumdar, Adv. for the Appellant (s) Shri S. S. Chattopadhyay, Suptd. (A. R.) for the Revenue ORDE
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enue is in appeal before the Tribunal against the setting aside of the penalties vide Appeal No. ST/78059/2018. The assessee is in appeal against the confirmation of the demand vide Appeal No. ST/77288/2018. 4. Heard both sides and perused the appeal records. 5. I find that the issue is no more res-entigra in view of the decision of the Hon ble Supreme Court of India in the case of Commissioner of Central Excise, Belgaum Vs. Vasavadatta Cement Ltd. reported in 2018 (11) G.S.T.L. 3 (S.C.). The relevant paragraphs are reproduced below:- 2. The entire issue hinges upon the interpretation that has to be given to input service which is defined in Rule 2(l) of the Cenvat Credit Rules, 2004. It may be stated at this stage itself that all these appeals relate to a period prior to 1-4-2008. The aforesaid Rule was amended w.e.f. 1-4- 2008 as would be noticed hereafter. However, since we are concerned with the unamended Rule, we reproduce the same hereunder: (l) input service means any service, –
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he aforesaid Rule observing that it is in two parts. In the first part, input service is defined with the expression means and in that context input service is defined as any service used by a provider of a taxable service or providing an output service or used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal . It is further held that second part of the definition starts from includes where some of the services are mentioned, which are included as input services . 4. We may make it clear that in the instant appeals, we are concerned with the first part of the definition. Insofar as second part is concerned, certain contentions, which have been raised by some of the assessees, have been rejected and that aspect is decided in favour of the Department. Since these appeals are filed by the Department questioning the interpretation that is given by the CESTAT as well as the H
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ssees had claimed the tax paid on the transportation of final products from the place of removal (i.e. the place of manufacture) to either the place to their respective depots or transport upto the place of the customers, if from the place of removal the goods were directly delivered at customers place. It is made clear that only first set of transportation from the place of removal was claimed. To put it otherwise, in those cases where the tax paid on transportation on the goods from the place of removal upto the place of depot only that was claimed and if there was any such tax again paid from the place of depot to the place of customers, the Cenvat credit thereof was not claimed and there is no dispute about it. 6. The aforesaid approach of the Full Bench of the CESTAT, as affirmed by the High Court, appears to be perfectly correct and we do not find any error therein. For the sake of convenience, we would like to reproduce the following discussion contained in the judgment of the H
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not specifically used in the said section in the context in which the phrase clearance of final products from the place of removal is used, it includes the transportation charges. Because, after the final products has reached the place of removal, to clear the final products nothing more needs to be done, except transporting the said final products to the ultimate destination i.e. the customer s/buyer of the said product, apart from attending to certain ancillary services as mentioned above which ensures proper delivery of the finished product upto the customer. Therefore, all such services rendered by the manufacturer are included in the definition of input service . However, as the legislature has chosen to use the word means in this portion of the definition, it has to be construed strictly and in a restrictive manner. After defining the input service used by the manufacturer in a restrictive manner, in the later portion of the definition, the legislature has used the word includes
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emoved for being delivered to the customer. Therefore, input service includes not only the inward transportation of inputs or capital goods but also includes outward transportation of the final product upto the place of removal. Therefore, in the later portion of the definition, an outer limit is prescribed for outward transportation, i.e., up to the place of removal. 7. As mentioned above, the expression used in the aforesaid Rule is from the place of removal . It has to be from the place of removal upto a certain point. Therefore, tax paid on the transportation of the final product from the place of removal upto the first point, whether it is depot or the customer, has to be allowed. 8. Our view gets support from the amendment which has been carried out by the rule making authority w.e.f. 1-4-2008 vide Notification No. 10/2008-C.E. (N.T.), dated 1-3-2008 whereby the aforesaid expression from the place of removal is substituted by upto the place of removal . Thus from 1-4-2008, with t
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