TMI Blog2006 (11) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... The facts of the case in brief are as follows:- (a) The Appellants are engaged in the manufacture of Stablizer Bar falling under Chapter No. 87 of the Schedule to the Central Excise Tariff Act, 1985 and availing the Cenvat Credit on inputs, Capital goods and input services in accordance with the provisions of Cenvat Credit Rules, 2004. It was noticed that the Appellants had availed Cenvat Credit of the Service Tax paid on outward freight. As per the provisions of Rule of the Cenvat Credit Rules, 2004, (the Rules) a manufacturer of final products shall be allowed to take/avail the credit of the Service Tax paid with reference to any input service received by them. (b) The input service has been defined in Rule 2(1) of Cenvat Credit Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the outward transportation. Therefore the Cenvat Credit of Service Tax to the tune of Rs. 1,00,503/- and Rs. 27,126/- along with interest appeared to be recoverable from. them under Rule 14 of Cenvat Credit Rules, 2004. (d) Accordingly, two Show Cause Notices dated 6-3-06 and 21/24-4-06 were issued to them to deny the Cenvat Credit availed by them on the outward transportation under Rule 14 of the Cenvat Credit Rules, 2004. It was also proposed to impose a penalty under Rule 15 of the Cenvat Credit Rules, 2004 for wrong utilization of Cenvat Credit availed on outward Transportation in contravention of Rule 3(1) of the Cenvat Credit Rules, 2004. (e) Vide the impugned orders the Adjudicating Authority has confirmed the demand of Cenvat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 as Transaction Value is fixed accordingly under Section 4 of the Central Excise Act, 1944 vide which freight amount is included in the sale price and as such, the place of removal is not the factory gate of the Appellants but at the factory gates of their buyers. (iii) The Appellants pray that the learned Adjudicating Authority has wrongly held that the provisions of Cenvat Credit Rules, 2004 are crystal clear and leave no ambiguity because even the learned Adjudicating Authority is not clear in his mind as his observation are "outwards transportation from the factory not appears to be a input service." This shows that he himself is not definite and is doubtful abou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... removal was their factory gate even then the said alleged outward freight is coming in the purview of input service for availment of Cenvat Credit. (vi) The Appellants state that the provisions of Rule 3 Cenvat Credit Rules, 2004 are clear and that the department had wrongly interpreted, the law on the subject whereas they had followed the right track as were permissible under such circumstances. (vii) In view of above it is prayed that the appeal be accepted and Order-in-Original be set aside and the Cenvat Credit be allowed for the amount in question which related to amount paid as Service Tax by them on freight and had paid for their Goods Transport Agency Service. 4. The two Appeals are being taken up for final disposal after di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d therefore the credit availed by them cannot be denied. If the intention was to deny credit in respect of outward transportation of finished goods then the same could have been specifically excluded in the definition itself, which however has not been done. Further if the intention was to deny the credit in respect of outward transportation then there was no need to include the words "and clearance of the final products from the place of removal" in rule 2(1) of the Rules relating to the definition of the input service. Hence, going by the definition of the term "input service" in the Cenvat Credit Rules, I am of the opinion that the Service Tax paid on transportation of finished goods from the factory to the premises of the customer can b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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