TaxTMI 
TaxTMI 
2017 (6) TMI 803
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..... (Addl. Commissioner) ORDER Per: Dr. D.M. Misra The appeals listed above filed against respective Orders, since involve a common issue, are taken up together for disposal. 2. To understand the issue, it would suffice to narrate the facts of the Appeal No.E/11954/2013 filed M/s Shubhalaxmi Polyesters Ltd. The Appellants are engaged in the manufacturer of excisable goods had availed CENVAT Credit of Rs. 1,11,828/- of the Service Tax paid on out ward freight (GTA service), during the period November 2008 to October 2009. Alleging that credit availed on the GTA service (out ward freight) is not admissible, demand notice was issued for recovery of the credit with interest and proposal for penalty. On adjudication the demand was confirmed with interest and equal amount of penalty. After unsuccessfully challenging the Order before the Ld. Commissioner(Appeals), the present Appeal is filed. 3. The learned Advocate Shri S.R. Dixit, advancing the argument for the Appellants submitted that in few cases the period involved comprises of both prior to 01.04.08 and thereafter. It is his contention that the admissibility of CENVAT Credit on GTA services prior to 01.04.2008 has been....
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....#39;ble Supreme Court was in the context of ascertaining the assessable value of the goods for determination of duty and hence cannot be made applicable to consider the eligibility of CENVAT Credit on GTA Service, inasmuch as the former one relates to levy and collection of excise duty, whereas the Credit Rules are designed to avoid cascading effect or double taxation, therefore, the CENVAT Credit Rules deserves more liberal interpretation. 3.4 He has further submitted that in interpreting the definition of "input services" while answering the question of eligibility of credit of GTA Service (outward freight) for the period prior to 01.04.2008, it has been laid down that the intention of the respective parties to the transaction should be ascertained so as to determine the actual place of removal i.e. at the factory gate or at the customer's premises. Therefore, the place of removal as understood in the context of extending the CENVAT Credit on outward freight, be given a liberal interpretation. 3.5 It is his further contention that the CBEC in its Circular dt.23.08.2007 clearly brought out the aforesaid interpretation of "place of removal" referring to the ratio laid down in....
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....se Act, 1944 all along has been adopted by various High Courts while examining the eligibility of CENVAT Credit on outward freight, whether an "input service" or otherwise, as defined under Rule 2(l) of CENVAT Credit Rules 2004 till 01.04.2008. In support, he has referred to the judgment of Hon'ble Gujarat High Court in the case of Parth Poly Woven Pvt. Limited. - 2012 (25) STR 4 (Guj.), Hon'ble Chhatisgarh High Court in the case of Lafarge India Ltd Vs CCE Raipur - 2014 (35) STR 645 (Chhatisgarh), Hon'ble Calcutta High Court in the case of CCE Kolkata-VI Vs Vesuvious India Ltd - 2014 (34) STR 26 (Cal.). Therefore, the meaning of "place of removal" interpreted in the context of Section 4 of CEA,1944 by Hon'ble Supreme Court recently in 'Ispat Industries' case, is squarely applicable in understanding and applying its meaning to the expression place of removal employed in the definition of "input services" under Rule 2(l) of CENVAT Credit Rules 2004. The learned Authorized Representative for the Revenue further submitted that the Hon'ble Supreme Court in Ispat industries case, unambiguously laid down at Para 24 of the said judgment that in any circumstances, buyer....
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....meaning has been applied by the Courts and Tribunal in scrutinizing of the claim of the assesse on the eligibility to CENVAT Credit on the service tax paid on outward freight service incurred in the sale/delivery of manufactured goods. 11. The Revenue, after delivery of the judgment by Hon'ble Supreme Court in Ispat Industries' case(supra), advanced an argument that the meaning of "place of removal", as held in the said judgment, invariably in all cases being at the factory gate or depot, where the goods are stored after removal from the factory or the places mentioned under the definition of "place of removal" prescribed in Rule 4(4)(c) of Central Excise Act, 1944, therefore, the buyers premises cannot be considered as the "place of removal", accordingly, the outward freight charges(GTA Service) cannot fall within the definition of "input service", and credit of the service tax paid on the same is not admissible. The said objection is for the period after amendment to the definition of "input service" w.e.f.01.4.2008. On the admissibility of CENVAT Credit on outward freight service (GTA service) for the period prior to 01.04.2008, both sides have fairly accepted that the is....
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....gly, despite the substituted Section 4 not providing for a depot or other premises as a place of removal, Rule 7 deals with the normal transaction value of goods transferred to a depot or other premises which is said to be at or about the same time or the time nearest to the time of removal of goods under assessment. 22. To complete the picture, by an Amendment Act with effect from 14-5-2003, Section 4 was again amended so as to re-include sub-clause (iii) of old Section 4(3)(b) (pre 2000) as Section 4(3)(c)(iii). This amendment reads as follows :- "(3)(c)(iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory;" Also, Rule 5 of the Central Excise Rules was substituted, with effect from 1-3-2003, to read as follows : "Rule 5. Where any excisable goods are sold in the circumstances specified in clause (a) of sub-section (1) of section 4 of the Act except the circumstances in which the excisable goods are sold for delivery at a place other than the place of removal, then the value of such excisable goods shall be deemed to be the transaction value, excluding the....
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.... that the 'place of removal' and the 'place of delivery' are distinct places and the freight charges incurred from the place of removal to the place of delivery has to be excluded from the assessable value of the goods. 15. No doubt, by virtue of Rule 2(t) of CENVAT Credit Rules, 2004 the meaning of expression not defined therein has been borrowed from the Central Excise Act and the Rules made thereunder, but it has to be read in the context in which it has been used. This principle has been laid down by the Hon'ble Supreme Court in a catena of cases. In the case of V.F. & G Insurance Co. Vs. M/s Fraser & Ross AIR 1960 SC 971 their Lordships observed as: "It is well settled that all statutory definitions or abbreviations must be read subject to the qualification variously expressed in the definition clauses which created them and it may be that even where the definition is exhaustive inasmuch as the word defined is said to mean a certain thing, it is possible for the word to have a somewhat different meaning in different sections of the Act depending upon the subject or context. That is why all definitions in statutes generally begin with the qualifying words, similar to the ....
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....f such is the condition of sale and accordingly the Service Tax paid on outward freight (GTA service) shall be eligible as CENVAT Credit. On the face of such argument, it is relevant to reproduce the said Circular. "Circular No.988/12/2014-CX, dated 20-10-2014 F.No.267/49/2013-CX. 8 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi Subject : Determination of place of removal - Regarding. Attention is invited to Notification No. 21/2014-C.E. (N.T.), dated 11-7-2014 vide which the definition of "place of removal" has been inserted in the CENVAT Credit Rules, 2004 (CCR). Under these rules there are provisions that the credit of input services is available upto the place of removal. As the definition is now provided in the CCR, wherever Cenvat credit is available upto the place of removal, this definition of place of removal would apply, irrespective of the nature of assessment of duty. (2) The second associated issue is regarding ascertainment of place of removal. In this regard there are two circulars of the Board namely 37B order no 59/1/2003, dated 3-3-2003 [2003 (153) E.L.T. T7] and Circular No.97/8....
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....ods Act, 1930 as held by Hon'ble Tribunal in case of Associated Strips Ltd. v. Commissioner of Central Excise, New Delhi [2002 (143) E.L.T. 131 (Tri.-Del.)]. This principle was upheld by the Hon'ble Supreme Court in case of M/s. Escorts JCB Limited v. CCE, New Delhi [2002 (146) E.L.T. 31 (S.C.)]. (4) Instances have come to notice of the Board, where on the basis of the claims of the manufacturer regarding freight charges or who bore the risk of insurance, the place of removal was decided without ascertaining the place where transfer of property in goods has taken place. This is a deviation from the Board's circular and is also contrary to the legal position on the subject. (5) It may be noted that there are very well laid rules regarding the time when property in goods is transferred from the buyer to the seller in the Sale of Goods Act, 1930 which has been referred at paragraph 17 of the Associated Strips Case (supra) reproduced below for ease of reference - "17. Now we are to consider the facts of the present case as to find out when did the transfer of possession of the goods to the buyer occur or when did the property in the goods pass from the seller to the buyer. Is ....
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....he Revenue in his submission even though did not contradict the meaning of place removal explained in the said circular, however submitted that the circular is binding on the Department and not on this Tribunal, which is free to take a contrary view. I do not find merit in the argument of the Ld. A.R in as much as in the context of allowing credit on outward freight (GTA service) the approach of the Board has been consistent all along even though the definition of "place of removal" borrowed from the Section 4 of CEA, 1944 and later inserted in the CENVAT Credit Rules 2004 w.e.f 11.07.2014. Also, even after the delivery of the judgment in Ispat Industries' case, explaining the definition of "place of removal" in the context of Section 4 of Central Excise Act, 1944, the Board has not issued any further circular, restricting the meaning of "place of removal" in the light of the observations of the Hon'ble Supreme Court. Therefore, the CENVAT Credit of Service Tax paid on outward freight (GTA service) is admissible when the condition of sale of goods puts burden on the manufacturer to deliver the goods at the buyers premises. This Tribunal has come to the same conclusion in Forace....