TaxTMI 
TaxTMI 
2026 (3) TMI 1311
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....cting investigation, a show cause notice dated 19.11.2009 was issued to the appellant demanding Cenvat credit of Rs.4,26,427/- of service tax paid on outward transportation from the place of removal and a credit of Rs.75,407/- of service tax on inward transportation under Rule 14 of the Cenvat Credit Rules,2004 read with Section 11A of the Central Excise Act,1944. Penalty was also proposed on them under Rule 15(1) of the Cenvat Credit Rules, 2004 (hereinafter referred to CCR,2004). 1.1 The show cause notice was decided by the Assistant Commissioner wherein he confirmed the demand of service tax credit as proposed in the show cause notice along with interest and also imposed equal penalty on the appellant under Rule 15(1) of CCR,2004 read with Section 11AC of the Central Excise Act,1944. Aggrieved with the said order, the appellant filed appeal before the Commissioner (Appeals) who vide impugned order dated 28.10.2021 rejected their appeal and upheld the order of the adjudicating authority. The appellant, thereafter filed appeal before this Tribunal. 2. In their appeal, the appellant took the following grounds:- * The issue of eligibility of Cenvat credit of service t....
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....arat High Court. * Circular dated 23.08.2007 and judgments relied upon by the Commissioner (Appeals) are not applicable to the present case. The judgment in the case of Ultratech Cements Ltd reported at 2007 (6) STR 364 (Tribunal) is a stay order only and has not attained finality. * Credit of service tax paid to transporter on transportation of inputs to the factory is allowable as they have valid invoices with them. They rely on the decision in the case of M/s Geeta Industries Pvt Ltd reported at 2011 (22) STR 293 (Tri.-Del.) wherein it was held that when the treasury has not been affected by virtue of collection of Service tax from the service provider, there can be no second demand on the service recipient to pay tax under RCM on the same service. * Reversal of credit by them should not be construed as acceptance of liability. * The impugned demand is time barred as show cause has been issued on 19.11.2009 for period from March,2005 to August, 2005. * Penalty is not imposable on them under Rule 15(1) of the CCR,2004 as they were under bona fide belief that Cenvat credit is available to them. Further, where interpretation of the defin....
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....ation No. 32/2004-ST dated 03.12.2004 which restricts availment of Cenvat credit. Regarding penalty, she relied on the decision of Hon'ble Supreme Court in the case of M/s Rajasthan Spinning and Weaving Mills Ltd reported at 2009 (238) ELT 3 (SC) and Dharmendra Textile Processors reported at 2008 (231) ELT 3 (SC). 4.2 In additional submission dated 17thMarch,2026, learned AR submitted copy of following decisions to supporter her case: - * Commissioner of Central Excise Vs M/s. Vesuvious India Ltd-2013(12) TMI 1025-Calcutta High Court * Maharashtra Scooters Ltd Vs Commissioner of C. Ex, Pune-II2015(9) TMI 1161-CESTAT Mumbai * M/s. Mahle Engine Components Vs Ajay Kumar Mittal & S C Sharma, JJ-2019-TIOL-2805-HC-MP-CX in High Court of Madhya Pradesh She mentioned that Hon'ble Calcutta High Court in the case of M/s Vesuvious India Ltd (cited supra) has allowed the Revenue's appeal by holding that as per definition of 'Input Service' under Section 2(i)(ii) read as a whole would show that outward transportation charges or taxes paid in regard thereto claimable only with regard to those transports which were made from one place of removal to another place o....
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....ective). The relevant para 8 of the decision is reproduced below:- "8) 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. and M/s. Ultratech Cement Ltd. Those judgments, obviously, dealt with unamended Rule 2(1) of Rules, 2004. The three conditions which were mentioned explaining the 'place of removal' are defined in Section 4 of the Act. It is not the case of the Department that the three conditions laid down in the said Circular are not satisfied. If we accept the contention of the Department, it would nullify the effect of the word 'from' the place of removal appearing in the aforesaid definition. Once it is accepted that place of removal is the factory premises of the assessee, outward transportation from the said place would clearly amount to input service. That place can be warehouse of the manufacturer or it can be customer's place if from the place of removal the goods are directly dispatched to the place of the customer. One such outbound transportation from the place of removal gets covered by the definition of input service." ....