TaxTMI 
TaxTMI 
2024 (10) TMI 617
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....tilized as Cenvat credit against M/s Dalla Cement Factory (Unit of Jai Prakash Associates Ltd.), Post Dalla, Sonebhadra under provisions of Rule 14 of Cenvat Credit Rules, 2004 readwith Section 11A(4) of Central Excise Act, 1944 alongwith interest under Section 11AA of the Act, ibid. (iii) I impose a penalty of Rs.7,44,807/- (Rupees Seven Lac Forty Four Thousand Eight Hundred Seven only) on M/s Dalla Cement Factory (Unit of Jai Prakash Associates Ltd.), Post Dalla, Sonebhadra under the provision of Rule 15(2) of Cenvat Credit Rules, 2004, read with Section 11AC of the Act. The party shall however be eligible for reduced penalty specified in clause (e) of Section 11AC of the Act, subject to fulfillment of condition specified therein." 2.1 A show cause notice dated 28.03.2017 has been issued to the Appellant seeking to deny Cenvat credit in respect of various services including GTA Services availed by the Appellant for clearance of the goods from their premises to the depots or to the premises of the customers on FOR basis. 2.2 Show cause notice has been adjudicated as per by the impugned order dropping of the all the demands except in respect of Cenvat credit availed ....
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....Court in the case of COMMISSIONER OF CENTRAL EXCISE AND S.T. Versus ULTRA TECH CEMENT LTD, in Civil Appeal No.11261 of 2016, decided on 1-2-2018. The core issue involved in this case was with regard to the admissibility or otherwise of the Cenvat credit on Goods Transport Agency service availed for transport of goods from the place of removal to buyer's premises. [Judgment per : A.K. Sikri, J.]. - The core issue involved in the present case is with regard to the admissibility or otherwise of the Cenvat credit on Goods Transport Agency service availed for transport of goods from the place of removal to buyer's premises. This issue has arisen in the following factual background : The respondent M/s. Ultratech Cement Ltd. (hereinafter referred to as the "assessee") is involved in packing and clearing/forwarding of cement classifiable under Chapter sub-heading 2523 29 10 of Central Excise Tariff Act, 1985, with Central Excise Registration No. AAACL6442LEM014. The assessee is also availing the benefit of Cenvat Credit facility under the Cenvat Credit Rules, 2004 ("Rules, 2004" for short). The assessee herein gets finished goods (cement) from its parent unit on stoc....
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....ocumentary evidence to prove that conditions laid down vide Circular dated August 23, 2007 has been fulfilled. Accordingly, the Adjudicating Authority passed the order as under : "(i) Demanding the irregular Cenvat credit availed on outward transportation of goods amounting to Rs.25,66,131/- under Rule 14 of Cenvat Credit Rules, 2004 read with Section 11A of Central Excise Act, 1944; (ii) Demanding interest under Rule 14 of Cenvat Credit Rules, 2004 read with Section 11AB of Central Excise Act, 1944 read with Section 75 of the Finance Act, 1994; (iii) Did not order for initiation of action under Rule 15(1) of Cenvat Credit Rules, 2004 read with Rule 25 of Central Excise Rules, 2002; (iv) Imposed penalty of Rs.25,66,131/- under Rule 15(3) of Cenvat Credit Rules, 2004; (v) Imposed penalty of Rs.1,00,000/- under Rule 25 of Central Excise Rules, 2002." 3. Aggrieved by the Order-in-Original No.24/2011, dated August 22, 2011, respondent/assessee preferred an appeal before Commissioner (Appeals). The Commissioner (Appeals) vide Order-in-Appeal No.57/2012-C.E., dated March 15, 2012 allowed the appeal and set aside the Order-in-Original ....
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....plication of sub-clause (ii). Reading of the aforesaid provision makes it clear that those services are included which are 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". 7. It may be relevant to point out here that the original definition of "input service" contained in Rule 2(l) of the Rules, 2004 used the expression "from the place of removal". As per the said definition, service used by the manufacturer of clearance of final products "from the place of removal" to the warehouse or customer's place etc., was exigible for Cenvat Credit. This stands finally decided in Civil Appeal No. 11710 of 2016 (Commissioner of Central Excise Belgaum v. M/s. Vasavadatta Cements Ltd.) vide judgment dated January 17, 2018. However, vide amendment carried out in the aforesaid Rules in the year 2008, which became effective from March 1, 2008, the word "from" is replaced by the word "upto". Thus, it is only "upto the place of removal" that service is treated as input service. This amendment has changed the entire scenario. The benefit which was admissible even beyon....
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....ure of the final product. Therefore, extending the credit beyond the point of removal of the final product on payment of duty would be contrary to the scheme of Cenvat Credit Rules. The main clause in the definition states that the service in regard to which credit of tax is sought, should be used in or in relation to clearance of the final products from the place of removal. The definition of input services should be read as a whole and should not be fragmented in order to avail ineligible credit. Once the clearances have taken place, the question of granting input service stage credit does not arise. Transportation is an entirely different activity from manufacture and this position remains settled by the judgment of Honorable Supreme Court in the cases of Bombay Tyre International - 1983 (14) E.L.T. 1896 (S.C.), Indian Oxygen Ltd. - 1988 (36) E.L.T. 723 (S.C.) and Baroda Electric Meters - 1997 (94) E.L.T. 13 (S.C.). The post removal transport of manufactured goods is not an input for the manufacturer. Similarly, in the case of M/s. Ultratech Cements Ltd. v. CCE, Bhatnagar - 2007 (6) S.T.R. 364 (Tribunal), it was held that after the final products are cleared from the pl....
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....lauses are read together, it becomes clear that transport service 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". Similarly, in the case of M/s. Ultratech Cements Ltd v. CCE Bhavnagar - 2007-TOIL-429-CESTAT-AHM = 2007 (6) S.T.R. 364 (Tribunal), it was held that after the final products are cleared from the place of removal, there will be no scope of subsequent use of service to be treated as input. The above observations and views explain the scope of the relevant provisions clearly, correctly and in accordance with the legal provisions. In conclusion, a manufacturer/consignor can take credit on the Service Tax paid on outward transport of goods up to the place of removal and not beyond that. 8.2 In this connection, the phrase "place of removal" needs determination taking into account the facts of an individual case and the applicable provisions. The phrase "place of rem....
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....t the said place." 11. As can be seen from the reading of the aforesaid portion of the circular, the issue was examined after keeping in mind judgments of CESTAT in Gujarat Ambuja Cement Ltd., 2007 (6) S.T.R. 249 (Tribunal) and M/s. Ultratech Cement Ltd., 2007 (6) S.T.R. 364 (Tri.- Ahd.). Those judgments, obviously, dealt with unamended Rule 2(l) of Rules, 2004. The three conditions which were mentioned explaining the "place of removal" as defined under Section 4 of the Act, there is no quarrel upto this stage. However, the important aspect of the matter is that Cenvat Credit is permissible in respect of "input service" and the Circular relates to the unamended regime. Therefore, it cannot be applied after amendment in the definition of "input service" which brought about a total change. Now, the definition of "place of removal" and the conditions which are to be satisfied have to be in the context of "upto" the place of removal. It is this amendment which has made the entire difference. That aspect is not dealt with in the said Board"s circular, nor it could be. 12. Secondly, if such a circular is made applicable even in respect of post amendment cases, it would ....