TaxTMI 
TaxTMI 
2023 (12) TMI 176
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....during AGUP audit of the appellant unit. The demand pertaining to earlier period i.e. April 2010 to March 2015 has already been decided vide OIO dated 31-10-2016. The present appeal is in respect of demand in sequel pertaining to a period of April, 2015 to March, 2016. By then the definition of 'place of removal' had been introduced in the Credit Rules vide Notification No.21/2014-CE (NT) dated 11-07-2014 which reads as under- (qa) "place of removal" means- (i) a factory or any other place or premises of production or manufacture of the excisable goods; (ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty; (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, from where such goods are removed; The appellant is claiming their direct shop under clause (iii) above which covers depot or consignment agent. I find that a depot is required to upkeep the record of goods received vis-à-vis goods sold. If there happens to be any variation in v....
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....le to the Central Excise Tariff Act, 1985 and also availing the facility of Cenvat credit under Cenvat Credit Rules, 2004. 2.2 During the course of Audit conducted by auditors of C & AG included their audit objections in Performance Audit Report No.33 of 2014. In para 4.5.2 of the said report following has been observed:- "4.5.2 During the test check of credit records of M/s India Yamaha Motors Pvt. Ltd. in Noida Commissionerate, we observed that the assessee availed CENVAT Credit of Service Tax of Rs. 18.72 Lakh paid on the services of rent, repair and maintenance services for its unit at Kolkata, West Bengal during the year 2012-13. The rent, repair and maintenance services were not related to the manufacturing activity and did not relate to the assessee premises as well. This resulted in irregular availing of CENVAT Credit of Rs. 18.72 Lakh." 2.3 After further investigating the matter, show cause notice dated 14.09.2015 was issued to the appellant, which was contested by the appellant and was adjudicated by the Order-in-Original No.DLI-LTUNT-000-COM-031-2016-17 dated 31.10.2016. 2.4 As a sequel of the same these statements of demands for recovery of Cenvat cred....
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....t Kolkata. In case of Metro Shoes Pvt. Ltd. Vs Commissioner of Central Excise 2008 (10) STR 382 (Tri.-Mumbai), they are allowed in similar situation. Cost of rent, repairing and maintenance of the direct shop is included in assessable value of motorcycles manufactured by the appellant. As per CBEC's Order No.59/1/2003-CX dated 03 March, 2003 clarified that the assessable value is to be determined at the place of removal. Hence, when these are taken into consideration while demanding assessable value on which duty has been paid involvement of credit in respect of the same cannot be upheld. There is no requirement/mandate under the Central Excise Act, 1944 that the direct retail shop and get it notified. There is no suppression by the appellant. Interest is not chargeable under Section 11AA and 11AB and penalties under Section 11AC are not imposable as the issue involved is an interpretation of law. Appellant has taken the credit under bonafide view entertained by them. 3.3 Arguing for the revenue learned Authorised Representative reiterates the findings recorded in the impugned order and the Order-in-Original. 4.1 We have considered the impu....
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....e factory gate, CBEC Central Excise Manual Chapter 3 Part III para 3.2 clarifies as follows: "If the goods are not sold at the factory gate or at the warehouse but they are transferred by the assessee to his depots or consignment agents or any other place for sale, the assessable value in such case for the goods cleared from factory/warehouse shall be the normal transaction value of such goods at the depot, etc. at or about the same time on which the goods as being valued are removed from the factory or warehouse. It may be pertinent to take note of the definition of "normal transaction value" as given in the valuation rules. What it basically means is the transaction value at which the greatest aggregate quantity of goods from the depots etc. are sold at or about the time of removal of the goods being from the factory/warehouse. If, however, the identical goods are not sold by the assessee from depot/consignment agent's place on the date of removal from the factory/warehouse, the nearest date on which such goods were sold or would be sold shall be taken into account. In either case if there are series of sales at or about the same time, the normal transaction value for sa....
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.... Supreme Court have in their order reported vide 2002(146)ELT497(SC) held, on 14.11.2002, that : "In these matters, the question is whether freight and insurance charges are to be included in the assessable value for the purposes of excise. This question is covered by the judgment of this Court in the case of Escort JCB Ltd. vs. Commissioner of Central Excise, Delhi 2002 (146)ELT31(SC). The only difference which has been pointed out is that in the case of Escorts case (Supra) the sale was at the factory gate whereas in this case the sale was from the depot. Learned Counsel for the appellants admit that the freight and insurance charges upto the Depot would be includible in the assessable value for the purposes of excise. However, the sale being at the Depot, the freight and insurance for delivery to the customers from the Depot would not be so includible as per the said judgment." 6. The Central Board of Excise and Customs have in consultation with Additional Solicitor General, decided not to file review petition against the said Supreme Court judgements. 7. "Assessable value" is to be determined at the "place of removal". Prior to 1.7.2000, "place of rem....
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....rity has not given any finding on this submission. 4.9 Interestingly, Commissioner (Appeals) says in his order that adjudicating authority in his earlier order states that direct shop at Kolkata belongs to M/s Frostees Export India Pvt. Ltd. and for that reason it cannot be place of removal while doing so Commissioner (Appeals) has failed to examine the basic question whether the goods were sold by the appellant from the direct shop which may be owned by M/s Frostees Export India Pvt. Ltd. or any other person. Once it is established that the appellant were paying duty on the value at which the bikes were sold from the direct shop at Kolkata then there cannot be any reason for not allowing the Cenvat Credit in respect of the services received at depot. The observations made by the Hon'ble Supreme Court in case of MRF Ltd [1997 (92) ELT 3 (SC)] though in respect of the Section 4 and Valuation Rules prior to their amendment in year 2000 as worth noting: 25. We agree that it is for each assessee to decide where to sell his goods. He can choose to sell his goods at the gate, i.e., at the place of removal or he may choose to sell his goods through his selling organisation, as....
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....each such priceshall be deemed to be normal value thereof. Sub-clause (b) (iii) is very important and makes it clear that a depot, the 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 are all places of removal. What is important to note is that each of the premises is referable only the manufacturer and not to the buyer of excisable goods. The depot or the premises of the consignment agent of the manufacturer are obviously places which are referable to the manufacturer. Even the expression "any other place of premises" refers only to a manufacturer's place or premises because such place or premises is to be stated to be where excisable goods "are to be sold". These are key words of the sub-section. The place or premises from where excisable goods are to be sold can only be manufacturer's premises or premises referable to the manufacturer. If we were to accept contention of the revenue, then these words will have to be substituted by the words "have been sold" which would then possibly have reference to buyer's premises. " 4.11 In view of the above discussion there is no justificat....
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.... we find that any input service used by the manufacturer, whether directly or indirectly in or in relation to the manufacture of final product and clearance of final product from the place of removal, stands eligible for availing as credit. It is undisputed, in this case, that the appellant had manufactured shoes in their factory premises and cleared the same to their own showrooms situated at various places. It is also undisputed that the sale of said shoes take place from the said showrooms only and did not take place from the factory premises. If that be so, it has to be accepted that the show rooms which are belonging to the appellant herein, have to be considered as place of removal. The services utilized by the appellant till the place of removal and the service tax paid thereon are to be considered as services utilized by him for the manufacture of final product and clearance of the same from the place of removal. This would indicate that the services which are rendered by various service providers during the course of transportation of the final product from the appellant's factory premises to their own showrooms located in various place, for e.g. GTA, warehousing facilitie....