TMI Blog2014 (8) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... Bangalore [2009 (5) TMI 48 - CESTAT, BANGALORE] - Decided in favour of assessee. - Central Excise Appeal No.1261 of 2010 - Final Order No. A/52897/2014-EX(DB) - Dated:- 21-7-2014 - Archana Wadhwa and Manmohan Singh, S S Kang, JJ. For the Appellant : Shri S Ganeshan, Sr. Adv., P K Ram, Adv. For the Respondent : Shri S K Panda, JCDR , Sh R K Mishra, DR JUDGEMENT Per: Archana Wadhwa: The appellant are engaged in manufacture of automobile parts, components and assemblies chargeable to Central Excise Duty under sub-heading 87141900 of the Central Excise Tariff. They also availed Cenvat credit of Central Excise Duty paid on inputs and capital goods and of service tax paid on 'input services', as per the provisions of Cenvat Credit Rules, 2004 (hereinafter referred to as CCR, 2004). The period of dispute in this case is from April 2006 to December 2008. The appellant while receiving orders from their customers sell the goods from their factory after issue of an invoice and despatch the goods to their customers through courier. The courier service is a taxable service and the appellant accordingly availed Cenvat credit of service tax paid on the courie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in 2007 (5) S.T.R. 142 (Tri.-Del.) has held that courier service used by the appellant for despatch of their final product is covered by the definition of 'input service' and is eligible for Cenvat credit, that the appellant have also paid an amount of ₹ 88,11,749/- for the period from 1/3/08 to 31/12/08 by debit entry dated 19/1/09 in the RG-23 Pt. II account, as intimated by them in their letter dated 19/1/09. However, he submits that though he is disputing the above confirmation also but there is absolutely no justification for confirmation of ₹ 1,72,95,410/- for the period prior to March 2008, when in view of the definition of 'input service', as it existed during that period, the Larger Bench of the Tribunal in the case of ABB Ltd. vs. CCE ST, Bangalore (supra) has held that the service of goods transport agency availed for outward transportation of the final products from the place of removal would be covered by the definition of 'input service'. The said decision stands upheld by the Hon'ble Karnataka High Court. 4. Shri S.K. Panda learned JCDR appearing for the Revenue reiterated the findings of the adjudicating authority and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 88,11,749/- and reported to the department vide letter dated 19/1/09 and beside this, they have also paid an interest of ₹ 5,41,563/- in respect of the same. It stands contented by the ld. Sr. Advocate that though they are also contesting the said demand but there is absolutely no basis for confirming the demand of ₹ 1,72,95,410/- pertaining to the period prior to 1/3/08. The main plea of the appellant is that during the period prior to 1/3/08, as per the definition of the term 'input service' as given in Rule 2 (l) of CCR, 2004, this term also included the services used for clearance of final product from the place of removal . According to the appellant since the courier services were used for clearance of final products from the place of removal, the same would be covered by the definition of 'input service' and hence same would be eligible for Cenvat credit and in this regard they rely upon the judgment of Larger Bench of the Tribunal in the case of ABB Ltd. vs. CCE ST, Bangalore (supra). In the case of ABB Ltd. vs. CCE ST, Bangalore Larger Bench of the Tribunal while interpreting the provisions of Rule 2 (l) of CCR, 2004, as the same exist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on which duty is paid is the FOR destination price, the Cenvat credit of the service tax on freight upto the customer's premises would be admissible. Based on this Circular of the Board, Hon'ble Punjab Haryana High Court in the case of CCE, Ludhiana vs. Gujarat Ambuja Cements Limited reported in 2009 (14) S.T.R. 3 (P H) has held that the service of outward transportation of finished goods from the factory/depot to the customer's premises can be treated as input service if the above-mentioned conditions of the Board Circular dated 23/08/07 are satisfied. 9. In terms of the decision of the Hon'ble Punjab Haryana High Court in the case of Gujarat Ambuja Cements Ltd. Laid and the Board's Circular, it has to be concluded that if the value of the service availed by the assessee does not form part of the assessable value on which Central Excise duty is payable, that service cannot be treated as input service for the purpose of Cenvat credit. As such the main question required to be decided in the present appeal is as to whether the sales were on FOR basis. 10. It is seen that the said question was put to the Learned Senior advocate, during the course of heari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue of Cenvat Credit on inputs/input service are two independent issues having no connection, is not a correct view and the same has not even been affirmed by Hon'ble Karnataka High Court in its judgment reported in 2011(23) STR 97 (Kar.). In the case of LG Electronics Ltd. (Supra) cited by the learned counsel for the Appellant, the Tribunal had simply relied upon the Board's Circular No.137/3/06-CX-4 dt. 02.02.06 and had not gone into the question of Its correctness. 12. In view of the above declaration of law by the Tribunal, it has to be held that where the final product is being cleared either under specific rate of duty or in terms of the MRP declaration as per section 4A of the Act, the 'place of removal' would be factory gate. If that be so the Cenvat credit of Service Tax paid on the courier services from upto the factory gate would not be available to the appellant. 13. However, in terms of the said decision of the Tribunal in the case of Ultra Cement, the benefit of limitation stands extended to the appellant. The Tribunal, while extending the benefit of limitation has observed as under:- 8.1. So far as the Cenvat Credit demand for the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the 'place of removal' would be factory gate. If that be so, the CENVAT Credit of Service tax paid on the Courier Service from or upto the factory gate would not be available to the appellant. I concur with this finding. 17. However, on the point of limitation, the order has relied upon tribunal's Final Order No.58257-58259 dated 18.11.2013 in the case of M/s Ultra Tech Cements Ltd which was a case in which, a plea was made and was accepted on limitation on the ground that for the period prior or 01.04.2008 the longer period of limitation is not invokable in view of the conflicting decisions in the case of Gujarat Ambuja Cement Ltd. as reported in 2009 (236) ELT 431 (P H) and the decision of the Larger Bench of the Tribunal in ABB Ltd. case reported in 2009 (15) STR 23 (Tri.LB) which was upheld by the Hon'ble Karnataka High Court vide judgement reported in 2011 (23) STR 97 (Kar.) and which view was also endorsed by the Hon'ble Gujarat High Court in case of M/s Parth Poly Wooven Pvt. Ltd. reported in 2012 (25) STR 4 (Guj.). On this aspect, I find that in ABB Ltd. case before the Larger Bench, the issue before the Hon'ble Tribunal was never in relation to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... difference of opinion has been referred to the third Member. Whether bar of limitation as prescribed under rule 14 of the Cenvat Credit Rule 2004 read with Section 11A of Central Excise Act, 1944 is invokable and Cenvat Credit was not recoverable for extended period as held by Member (Judicial); Or Whether bar of limitation as prescribed under Rule 14 of the Cenvat Credit Rule, 2014 read with Section 11A was not attracted and cenvat credit was recoverable as held by Member (Technical). 2. Brief facts of the Case are that the appellant are engaged in the manufacture of automobile parts, components and assemblies. The appellant were availing cenvat credit of central excise duty paid inputs and capital goods and service tax paid on input services as per the provisions of Cenvat Credit Rules, 2004. In the present case, show cause notice dated 19.02.2009 was issued to the appellant denying credit of service tax paid on courier services availing for despatch of goods to their customers. The case of the revenue is that the credit of service tax paid on outward freight is not admissible as the same is not covered by the definition of input services as provided under Rule 2(l) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition of the input service. The credit is not being denied on the ground that the freight is not part of assessable value or any reason. The only allegation in the show cause notice is that the appellant has wrongly availed credit which is not admissible and deliberately suppressed the fact with intent to evade payment of duty. 8. Appellants were regularly filing statutory returns and also utilising the same. In these circumstances and in view of the decision of Larger Bench decision of the Tribunal in the case of ABB Limited (supra) which is upheld by the Karnataka High Court I agree with the view taken by the ld. Member (Judicial) that the allegation of suppression of facts with intent to evade payment of duty is not sustainable hence the demand beyond the normal period is not sustainable. As the allegation of suppression is not sustainable, hence I agree with the view taken by ld. Member (Judicial) in respect of imposition of penalties also. (Pronounced on 4.7.2014.) (S S Kang) Vice-President FINAL ORDER NO.52897/2014- EX( DB) In view of the majority decision, major part of the demand is held to be barred by limitation and is accordingly set aside. However, a p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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