TaxTMI 
TaxTMI 
2019 (12) TMI 110
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....d the demand except to the extent of Rs. 3,44,228/- and interest on it. This credit has been disallowed by the Commissioner on the ground that the documents furnished by the appellant pertain to clearances of final products from the factory to the buyer's premises. Appellant is aggrieved by this denial of Cenvat credit and the order of its recovery and imposition of penalty to this extent. It is their submission that the purchase orders issued to them show sale in these cases was on FOR buyer's premises basis and therefore, they were entitled to Cenvat credit of the disputed amount. They, accordingly, prayed that the impugned order to the extent it was passed against their interest may be set aside and their appeal may be allowed. 3. Learned departmental representative, on the other hand, submits that the impugned order was passed by the learned adjudicating authority relying upon the order of the Tribunal in the case of M/s Ultratech Cement Ltd vs CC, CE & ST, Hyderabad as reported in 2016 (7) TMI 594. The relevant portion of the impugned order is as follows: "26.4 I find that the case law of M/s Ultratech Cement Ltd vs CC, CE & ST, Hyderabad relied on by the assesses, Hon'bl....
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.... the Hon'ble Apex Court has been followed by this bench in the case of Ultratech Cement Ltd in Appeal No. E/30147/2019 dt.06.6.2019. 5. I have considered the arguments on both sides and perused the records. The issue to be considered is whether the appellant is entitled to Cenvat credit on GTA services and if so, whether the amount denied in the impugned order has been correctly denied for the reasons mentioned therein. Undisputedly, cement has been sold in this case on FOR destination basis for delivery at the buyer's premises by the supplier. Cenvat Credit Rules permit availment of Cenvat credit on GTA services up to the place of removal. The question is whether in such a case, whether Cenvat credit on outward transportation to the buyer's premises is admissible. Identical issue was dealt with by the Hon'ble Apex Court in the case of Ultratech Cement Ltd [2018 (9) GSTL 337 (SC)]. Paras 2 to 13 of which are reproduced below: "2. After hearing, the Adjudicating Authority passed Order-in-Original dated August 22, 2011 holding that once the final products are cleared from the factory premises, extending the credit beyond the point of clearance of final product is not permissible....
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....acking and clearing of cement. It is supposed to pay the Service Tax on the aforesaid services. At the same time, it is entitled to avail the benefit of Cenvat Credit in respect of any input Service Tax paid. In the instant case, input Service Tax was also paid on the outward transportation of the goods from factory to the customer's premises of which the assessee claimed the credit. The question is as to whether it can be treated as 'input service'. 5. 'Input service' is defined in Rule 2(l) of the Rules, 2004 which reads as under: "2(l) "input service" means any service :- (i) Used by a provider of taxable service for providing an output services; or (ii) Used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accoun....
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.... the manufacturer whether directly or indirectly and also includes, interalia, services used in relation to inward transportation of inputs or export goods and outward transportation upto the place of removal. The two clauses in the definition of 'input services' take care to circumscribe input credit by stating that service used in relation to the clearance from the place of removal and service used for outward transportation upto the place of removal are to be treated as input service. The first clause does not mention transport service in particular. The second clause restricts transport service credit upto the place of removal. When these two clauses are read together, it becomes clear that transport services credit cannot go beyond transport upto the place of removal. The two clauses, the one dealing with general provision and other dealing with a specific item, are not to be read disjunctively so as to bring about conflict to defeat the laws' scheme. The purpose of interpretation is to find harmony and reconciliation among the various provisions. 15. Credit availability is in regard to 'inputs'. The credit covers duty paid on input materials as well as tax paid on services....
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....proach of the Commissioner (Appeals) has been approved by the CESTAT as well as by the High Court. This was the main argument advanced by the learned counsel for the respondent supporting the judgment of the High Court. 9. We are afraid that the aforesaid approach of the Courts below is clearly untenable for the following reasons: 10. In the first instance, it needs to be kept in mind that Board's Circular dated August 23, 2007 was issued in clarification of the definition of 'input service' as existed on that date i.e. it related to unamended definition. Relevant portion of the said circular is as under: "ISSUE : Up to what stage a manufacturer/consignor can take credit on the service tax paid on goods transport by road? COMMENTS: This issue has been examined in great detail by the CESTAT in the case of M/s. Gujarat Ambuja Cements Ltd. vs. CCE, Ludhiana [2007 (6) S.T.R. 249 (Tri-D)]. In this case, CESTAT has made the following observations :- "the post sale transport of manufactured goods is not an input for the manufacturer/consignor. The two clauses in the definition of 'input services' take care to circumscribe input credit by stating that service used in relatio....
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....from the factory; from where such goods are removed." It is, therefore, clear that for a manufacturer/consignor, the eligibility to avail credit of the Service Tax paid on the transportation during removal of excisable goods would depend upon the place of removal as per the definition. In case of a factory gate sale, sale from a nonduty paid warehouse, or from a duty paid depot (from where the excisable goods are sold, after their clearance from the factory), the determination of the 'place of removal' does not pose much problem. However, there may be situations where the manufacturer /consignor may claim that the sale has taken place at the destination point because in terms of the sale contract/agreement (i) the ownership of goods and the property in the goods remained with the seller of the goods till the delivery of the goods in acceptable condition to the purchaser at his door step; (ii) the seller bore the risk of loss of or damage to the goods during transit to the destination; and (iii) the freight charges were an integral part of the price of goods. In such cases, the credit of the Service Tax paid on the transportation up to such place of sale would be admissible if....