Writ petition dismissed as alternative remedy under Section 35(A) Central Excise Act available for Cenvat Credit dispute

The HC dismissed the writ petition filed by the petitioner regarding Cenvat Credit on Service Tax paid on outward transportation. The court held that the petitioner had an alternative remedy available under Section 35(A) of the Central Excise Act, 1944 before the Commissioner of Central Excise (Appeals). The court ruled that the appellate remedy cannot be circumvented merely because the petitioner believes they have a meritorious case. The requirement to pre-deposit amounts before appeal was deemed insufficient grounds to bypass the statutory remedy. The petitioner was granted liberty to file statutory appeal within 30 days.

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Issues Involved:
1. Admissibility of Cenvat Credit on Service Tax paid on outward transportation.
2. Availability of alternate remedy under Section 35(A) of the Central Excise Act, 1944.

Summary:

Issue 1: Admissibility of Cenvat Credit on Service Tax paid on outward transportation

The petitioner challenged the impugned order re-confirming the demand proposed in the show cause notice. The Tribunal had earlier remanded the case to the adjudicating authority to determine the place of removal and eligibility for credit of service tax paid on freight charges up to the buyer's premises. The adjudicating authority, however, reaffirmed that the 'place of removal' does not include the buyer's premises, citing the Supreme Court's judgment in M/s. Ultratech Cement Ltd. and the Central Excise Act and Rules. The adjudicating authority concluded that service tax paid on outward transportation from the factory to the customer's premises is not admissible as Cenvat Credit under Rule 3(1) read with Rule 2(1) of the Cenvat Credit Rules, 2004. The petitioner cited the Himachal Pradesh High Court's decision in M/S. Inox Products Pvt. Ltd., which held that in an F.O.R sale, outward transportation qualifies as 'input service' and is eligible for CENVAT Credit.

Issue 2: Availability of alternate remedy under Section 35(A) of the Central Excise Act, 1944

The court dismissed the writ petition on the grounds that the petitioner has an alternate remedy u/s 35(A) of the Central Excise Act, 1944, before the Commissioner of Central Excise (Appeals). The court emphasized that the appellate remedy prescribed under the Act cannot be circumvented merely because the petitioner believes they have a case on merits. The court noted that only 10% of the disputed tax needs to be pre-deposited for filing an appeal before the first appellate authority. The court granted the petitioner 30 days to file the statutory appeal and directed the Appellate Commissioner to consider the decision in M/S. Inox Products Pvt. Ltd. while disposing of the appeal on merits.

Conclusion:

The writ petition was dismissed with liberty to the petitioner to file a statutory appeal within 30 days, and the Appellate Commissioner was instructed to consider the relevant case law cited by the petitioner. No costs were awarded, and the connected Miscellaneous Petition was closed.

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