TaxTMI 
TaxTMI 
2014 (4) TMI 719
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....t credit of service tax paid on the courier service availed by them for despatch of the final products to their customers. The total Cenvat credit so availed during period from April 2006 to December 2008 is Rs. 2,61,07,159/-. The department was of the view that the courier service availed for despatch of the goods to their customers being in the nature of outward freight from the place of removal, is not covered by the definition of 'input service' as given in Rule 2 (l) of CCR, 2004. It is on this basis that a show cause notice dated 19/2/09 was issued to the appellant for demand of allegedly wrongly taken Cenvat credit amounting to Rs. 2,61,07,159/- under Rule 14 of Cenvat Credit Rules, 2004 read with proviso to Section 11A (1) of Central Excise Act, 1944 along with interest on it at the applicable rate under Section 11AB ibid and imposition of penalty on them under Rule 15 of the CCR, 2004 read with Section 11AC of Central Excise Act, 1944. The show cause notice was adjudicated by the Commissioner vide order-in-original dated 11/3/2010 by which the Cenvat credit demand of Rs. 2,61,07,159/- was confirmed along with interest and beside this, penalty of equal amount was im....
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....dicating authority and submits that in the light of the decision of the Hon'ble Punjab & Haryana High Court in the case of CCE, Ludhiana Vs. Gujarat Ambuja Cements Ltd. Reported in 2009 (14) STR 3 (P&H), the credit of service tax paid on the outward transportation of finished goods from the factory/depot to the customer's premises can be treated as input service only if the conditions as laid down in the Board Circular No. 97/6/2007-ST dated 23/8/2007 are fulfilled. As per the said decision, the sales have to be on FOR basis. The appellant have not placed any evidence on record to show that the sales were on FOR basis. Accordingly, he prays for rejecting the appeal. 5. We have carefully considered the submissions from both the sides and perused the records. 6. The point of dispute in this case is as to whether during the period from April 2006 to December 2008, the appellant were eligible for Cenvat credit of service tax paid on the courier service availed by them for despatch of the motor vehicle parts to their customers. During the period till 28/2/08, the definition of 'input service' as given in Rule 2 (l) of CCR, 2004 was as under :- ....
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....erpreting the provisions of Rule 2 (l) of CCR, 2004, as the same existed during the period prior to 1/3/08, has held that the service of outward transportation of finished goods from the place of removal is covered by the definition of 'input service' and there is no requirement that for the service of outward transportation from the place of removal to be called 'input service', the cost of freight must be included in the transaction value of the manufactured goods, as valuation of the finished goods and Cenvat credit are independent of each other. Tribunal in this case also observed that the service of outward transportation of finished goods is an "activity related to business" and for this reason, the same would be covered by the definition of 'input service' irrespective of whether the cost of transportation from the place of removal to the customer's premises was part of the assessable value of finished goods or not. Appeal (CEA No.121/2009) filed by the Department against this judgment of the Larger Bench of Tribunal has been dismissed by Hon'ble Karnataka High Court vide judgment dated 23/3/2011 reported in 2011 (23) S.T.R. 97. 8. On the q....
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.... basis. 10. It is seen that the said question was put to the Learned Senior advocate, during the course of hearing who proceeded on the assumption that the assessable value of the said spare part was being determined under section 4 of the Central Excise Act, 1944. However, subsequent to the conclusion of hearing, the appellant vide their letter dated 16.09.2013 submitted that the spare parts were actually being assessed under section 4A of the Central Excise Act. However, it stands contended that even after deducting the amount of statutory abatement, the assessable value would be in excess of the total amount recovered by them from its dealers including the said courier charges and as such it can be safely concluded that the cost of the courier service is included in the value of the spare parts. As such it is pleaded in the said letter that the appellant submissions deserves to succeeded irrespective of whether the assessable value of the said spare parts was being determined under section 4 or under section 4A of the Act. 11. We find that the Tribunal in the case of M/s Ultra Cement Ltd. vide its order final order No. 58257-58259 dated 18.11.2013 has considered the said i....
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....al in the case of Ultra Cement, the benefit of limitation stands extended to the appellant. The Tribunal, while extending the benefit of limitation has observed as under:- "8.1. So far as the Cenvat Credit demand for the period prior to 01.04.08 is concerned, after considering the submissions from both the sides, we are of the view irrespective of the merits of the Appellant's case for this period, the longer limitation period under proviso to section 11 A(1) of Central Excise Act, 1944 would not be invokable, as during the period of dispute there were conflicting judgments on the point of admissibility of Cenvat Credit of Service tax paid on GTA Service availed for transportation of finished goods from the factory gate/depot to the customers' premises, inasmuch as while the Tribunal in case of Gujarat Ambuja Cement Ltd. (Supra) had held that this Cenvat Credit would be limited only to the GTA Service availed for transportation of finished goods up to the place of removal, the Larger Bench of the Tribunal in the Case of ABB Limited and Hon'ble Karnataka High Court and Hon'ble Gujarat High Court had taken a contrary view. The Apex Court in case ....
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....on'ble Gujarat High Court in case of M/s Parth Poly Wooven Pvt. Ltd. reported in 2012 (25) STR 4 (Guj.). On this aspect, I find that in ABB Ltd. case before the Larger Bench, the issue before the Hon'ble Tribunal was never in relation to Section 4A or specific rate of duty. Further, when the same matter went up to Karnataka High Court. The Hon'ble High Court had made it clear in Para 15 and 16 that the expression 'place or removal' in its application is to be confined for the purpose of Section 4 only. Meaning thereby that the decision has no applicability in case of assessment under Section 4A and under specific rate of duty. 18. Now, next coming to the judgment of the Hon'ble Gujarat High Court, the issue again was never in relation to Section 4A of specific rate of duty. Further, the judgment of Hon'ble Punjab and Haryana High Court as reported in 2009 (236) E.L.T. 431 (P&H) which has been relied upon to show the conflict of view, the matter did not pertain to clearances which were effected under Section 4A on the basis of MRP based assessment or for assessment based on specific rate of duty. 19. Therefore, I find that there has not been any con....