TaxTMI 
TaxTMI 
2019 (3) TMI 519
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....ght in law in holding that the input service credit availed in respect of GTA services was not allowable beyond the place of removal on or after 01.4.2008 as per the amendment to Rule 2(l) of the CENVAT Credit Rules, 2004? and ii. Whether, on the facts and in the circumstances of the case, the order of the Tribunal is right in law in holding that the judgment of the Hon'ble Supreme Court in the case of CCE & ST Vs. Ultra Tech Cement Ltd. [reported in 2018 (2) SCC 721] following the decision in the case of CCE, Belgaum Vs. Vasavadatta Cements Ltd. [reported in (2018) 52 GSTR 232 (SC)] applies only to first limb of the definition of Section 2(l) of the CENVAT Credit Rules, 2004 and does not apply to the second limb of the definition ?" 3. We have heard Mr.R.Venkataraman, learned Senior Counsel, assisted by Mrs.Lakshmi Sriram, learned counsel for the appellant - assessee and Mr.T.L.Thirumalaiswamy, learned Senior Standing Counsel accepting notice for the respondent - Department. 4. The assessee is engaged in the manufacture of footwear falling under Chapter Sub Headings 64039120 and 64039920 of the First Schedule to the Central Excise Tariff Act, 1985. The assessee ....
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....to MRP based on assessment and at the factory level, the footwear manufactured are cleared on payment of duty to RDCs or WSDCs. The footwears are eligible to CENVAT credit. The assessee availed the CENVAT credit on the duties paid on capital goods, inputs and input services used or in relation to the manufacture of footwears in terms of the CENVAT Credit Rules, 2004 (for brevity, the CCR). The credit availed by the assessee includes service tax paid on the input services received at the factory and paid for at the factory and such credits are utilized for payment of excise duty on footwear and no credit is availed in factories manufacturing wholly exempted footwears. 8. It is also the case of the assessee that they received and used various input services, for which, invoices were raised at their head office and the RDCs. In respect of the input services received and paid for either by the headquarters or by the RDCs, the credit availed thereon was distributed via input service distributor (ISD) route. The credit taken at the headquarters and the RDCs was apportioned on the basis of the total excisable and non excisable production across India and distributed to the duty paying ....
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....d that the CENVAT credit distributed by an ISD cannot be denied at the hands of the units receiving the credit and once the cost of input service becomes a part of the assessable value of the final product manufacture by the assessee, on which, the excise duty is paid, they are entitled to avail CENVAT credit of service tax paid on such input services. It is further contended by the assessee that the assessment under Section 4A of the Act does not change the meaning of the expression 'place of removal' as found in Rule 2(l) of the CCR. According to the assessee, in terms of the said definition, the expression 'place of removal' includes a factory, warehouse or depot, from where, the goods are sold and hence, credit would be eligible for the services upto this point. 13. The assessee's case is that without considering their objections, the Adjudicating Authority, by Orders-in-Original containing various dates such as 10.5.2010, 30.11.2011, 31.1.2012, 18.2.2013, 31.12.2014 and 23.6.2016, disallowed the input credit availed on the service tax paid and also levied penalty and interest on the ground that the credit taken in the said input services was not allow....
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....ecified rates (for example cement) or on the basis of valuation with reference to retail sale price (for example refrigerators), and selling the goods from a depot, is also eligible to take credit of service tax paid on transportation of goods up to such depot. The doubt appears to be based on reasoning that since such goods are not charged to duty on the basis of valuation under Section 4 of the Central Excise Act, the definition of the expression 'place of removal' given in that Section would not apply in case of such goods. 03. The matter has been examined at the level of the Central Board of Excise and Customs. It has been observed that the availment of credit and valuation for payment of duty are two independent issues. Further, the provisions under Rule 2(t) of the CENVAT Credit Rules refers to definitions under the Central Excise Act, 1944 and the Finance Act, 1994 for uniform understanding of the words and phrases used in the Credit Rules. Therefore, if an expression is not defined in the Credit Rules but is defined under a particular Section of the Central Excise Act, it shall be applicable to all goods for purposes of the Credit....
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....igible services availed upto the Depot/ RDCs by the appellant in this case would be eligible for availment of input service credit." 18. The issue, which should have been decided by the Adjudicating Authority, is as to whether the point of sale is the RDC as contended by the assessee. In fact, the Tribunal partly allowed the assessee's appeals on input service credit availed in all the RDCs in respect of renting of premises, courier, telephone, security services, etc., under Rule 2(l) of the CCR irrespective of the amendment i.e. before and after 01.4.2008 and also set aside the penalty. However, in respect of GTA services, the Adjudicating Authority and the Tribunal disallowed the input credit availed by the assessee beyond the RDCs/Corporate Office from 01.4.2008 and held that they are not eligible for the purpose of Rule 2(l) of the CCR as it stood after 01.4.2008. 19. To arrive at the correct conclusion, the Adjudicating Authority should have taken note of the decision of the Hon'ble Supreme Court in the case of CCE, Belgaum Vs. Vasavadatta Cements Ltd. [reported in (2018) 52 GSTR 232]. The issue, which fell for consideration before the Hon'ble Supreme Court w....
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....rior to 01.4.2008, the Hon'ble Supreme Court, in the case of Vasavadatta Cements Ltd., held that the tax paid on the transportation of final product from the place of removal upto the first point, whether it is the depot or the customer, has to be allowed and we find that the issue addressed by the Hon'ble Supreme Court in the decision in the case of Ultra Tech Cement Ltd., pertains to the first limb of the definition under Rule 2(l) of the CCR. In other words, the issue involved in that decision was regarding availment of CENVAT credit on goods transport agency service availed for transport of goods from the place of removal to buyer's premises. In the case of Ultra Tech Cement Ltd., the CENVAT credit on tax paid upto the customer's premises was disallowed, as it was found that the factory gate is to be determined as the 'place of removal'. Therefore, the larger question would be as to whether the assessee would have been non suited based on the decision in the case of Ultra Tech Cement Ltd. In our considered view, the assessee should not be non suited in the light of the said decision for more than one reason. 22. Firstly, the modus operandi of the asses....