AI Drafter 
TaxTMI 
TaxTMI 
2025 (7) TMI 1258
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....provisions of Cenvat Credit Rules, 2004. During the auditing of the appellant's records by CERA, it was noticed that the appellant had wrongly availed Cenvat credit of Service Tax from May 2008 onwards paid on the services of transportation of finished goods from their factory gate to the destination. The term input service defined under Rule 2(l) of the Cenvat Credit Rules, 2004, as amended with effect from 01.04.2008 vide Notification No.10/2008-CE (NT) dated 01.03.2008 includes outward transportation upto the place of removal. On examination of the copies of the purchase orders received by the appellant from their customers fixing the price of their goods, it was observed by the department that the goods were sold at the factory gate and the transaction value of the goods was fixed as ex-factory price and outward freight and insurance were not included in the assessable value. It was observed by the department that both the charges, freight and transit insurance for outward transportation of finished goods were borne by the customers and not by the appellant. It was also observed that the place of removal of the goods was the factory gate and hence the services of outward tr....
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....r goods were on ex-factory price basis and the freight for outward transportation of the finished goods and transit insurance charges did not form part of the assessable value. He has also stated that the place of removal for their goods was the factory gate in respect of all the clearances made by the appellant. On the basis of these observations, learned Commissioner (Appeals) concluded that the appellant does not qualify for eligibility of Cenvat credit in respect of outward freight and outward transit insurance as they have not fulfilled the conditions and hence the ruling of Hon'ble High Court cited by the appellant will not help the cause of the appellant in the present case. The case law in Coca Cola India Limited vs. CCE, Pune-III - 2009 (242) ELT 168 (Bom.), in which it was held by the Hon'ble Bombay High Court that any input service that form a part of value of final product should be eligible for Cenvat credit. 3.1 The learned Commissioner has cited ABB Limited case law reported in 2011 (23) S.T.R. 97 (Kar.) in which the Hon'ble Karnataka High Court held that after coming into effect the Notification No. 10/2008-CE (NT) dated 01.03.2008 through which the w....
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.... being the position Cenvat credit of service tax paid on outward freight, remitted to Goods Transport Agency for transportation of finished excisable goods, is admissible and therefore, the demand confirmed by the department is bad in law and under such facts and circumstances of the case, the question of imposition of penalty and demand of interest does not arise. 4.2 It has also been submitted by the learned Counsel for the appellant that regarding admissibility and inadmissibility of Cenvat credit of service tax paid on outward freight, there has been controversy before various Tribunals and High Courts. Therefore, under such circumstances, availment of Cenvat credit of service tax paid on outward freight cannot be alleged to be with malafide motives and imposition of penalty cannot be justified. 4.3 It has also been argued by the learned Counsel that the show cause notice dated 03.04.2012 demanding Cenvat credit of service tax of Rs. 5,33,578/- for the period January 2011 to March 2011 has invoked extended period beyond the normal period of limitation of one year under the special provisions of Section 11A of the Central Excise Act, 1944 for recovery of Cenvat credit of s....
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....ned AR further argued that in the present case the final product was cleared from the place of removal, whether it be factory or depot, by the appellant by making use of GTA service. The service so used is not coming within the ambit of the definition of "input service' for the period after 31.03.2008, hence it is clear that the appellant is not entitled to claim Cenvat credit on the Goods Transport Agency Service used by them for transportation of their final product from the place of removal for any period after 31.03.2008. 5.2. The learned AR for the department also cited case law The Commissioner, Central Excise and Service Tax vs. Ultratech Cement Limited - 2018 (9) GSTL 337 (SC) in which it has been held that the Goods Transport Agency Service was used for transportation of goods from the place of removal to buyer's premises hence, the assessee was not entitled to credit. In definition of 'input service' in Rule 2(l) of Cenvat Credit Rules, 2004 'from place of removal' has been replaced in 2008 by 'upto place of removal'. The word 'From' was the indicator of starting point, and 'upto' signifies terminating point. The CBE & C (Central Board of Excise & Customs) Circular....