Tribunal denies Cenvat Credit for GTA services beyond removal point under Rule 2(l) post-2008.

The Tribunal upheld the denial of Cenvat Credit for GTA services beyond the place of removal post the 2008 amendment to Rule 2(l) of Cenvat Credit Rules, 2004. The extended period of limitation was not applicable before May 2010 due to lack of malafide intention, but the demand for the period June 2010 to October 2010 within the normal period was upheld. The appeal was remanded for recalculating the demand for the normal period without imposing any penalty.

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Issues involved:
1. Entitlement of GTA service as an input service under Rule 2(l) of Cenvat Credit Rules, 2004 post 1.4.2008 for FOR sales beyond the place of removal.

Analysis:
1. The appellant, a government-owned corporation, availed Cenvat Credit on GTA Services for depot transfers and FOR sales from October 2007 to October 2010. A show cause notice proposed denial of Cenvat Credit amounting to Rs. 82,52,201/-, later reduced to Rs. 2,61,459/- for the period April 2008 to October 2010. The Commissioner relied on the Supreme Court's decision in C.C.E. & S.T. vs. Ultratech Cement Ltd. to deny the credit beyond the place of removal post the 2008 amendment to Rule 2(l) of Cenvat Credit Rules, 2004.

2. The appellant argued that the Cenvat credit for GTA service should be eligible as it is incurred up to the customer's premises, which is considered the place of removal in their case. They cited decisions supporting their claim, including a Co-ordinate Bench's ruling and High Court judgments. The appellant contended that the extended period of limitation was wrongly invoked, as there was no suppression of facts or willful default. They referred to a CBEC circular stating that the extended period should not be invoked in cases of interpretation of law before the Supreme Court's decision.

3. The Tribunal noted the 2008 amendment to Rule 2(l), replacing "from the place of removal" with "upto the place of removal," restricting the definition of input service. The Tribunal agreed with the Supreme Court's decision in Ultratech Cement, emphasizing that Cenvat credit for GTA services beyond the place of removal is not admissible post-amendment. The Tribunal rejected the appellant's arguments based on previous circulars and judgments, citing a Co-ordinate Bench's recent decision on a similar issue.

4. Regarding the extended period of limitation, the Tribunal acknowledged the divergent views before the Supreme Court's decision on GTA service under Rule 2(l) post-amendment in 2008. The Tribunal held that issues of interpretation of statutory provisions cannot be a basis for invoking the extended period. As the appellant was a Government of India Enterprise with no malafide intention to evade duty, the extended period was deemed inapplicable for the period before May 2010. However, for the period June 2010 to October 2010, within the normal period, the demand was upheld, and no penalty was imposed due to the absence of malafide intention.

5. The Tribunal disposed of the appeal, remanding the matter to the Adjudicating Authority for recalculating the demand for the normal period. The Tribunal pronounced the order on 19.02.2020.

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