TMI Blog2014 (4) TMI 719X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 courier service availed by them for despatch of the final products to their customers. The total Cenvat credit so availed during period from April 2006 to December 2008 is Rs. 2,61,07,159/-. The department was of the view that the courier service availed for despatch of the goods to their customers being in the nature of outward freight from the place of removal, is not covered by the definition of 'input service' as given in Rule 2 (l) of CCR, 2004. It is on this basis that a show cause notice dated 19/2/09 was issued to the appellant for demand of allegedly wrongly ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 submits that in the light of the decision of the Hon'ble Punjab Haryana High Court in the case of CCE, Ludhiana Vs. Gujarat Ambuja Cements Ltd. Reported in 2009 (14) STR 3 (P H), the credit of service tax paid on the outward transportation of finished goods from the factory/depot to the customer's premises can be treated as input service only if the conditions as laid down in the Board Circular No. 97/6/2007-ST dated 23/8/2007 are fulfilled. As per the said decision, the sales have to be on FOR basis. The appellant have not placed any evidence on record to show that the sales were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earance 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 existed during the period prior to 1/3/08, has held that the service of outward transportation of finished goods from the place of removal is covered by the definition of 'input service' and there is no requirement that for the service of outward transportation from the place of removal to be called 'input service', the cost of freight must be included in the transaction value of the manufactured goods, as valuation of the finished goods and Cenvat credit are independent of each other. Tribunal in this case also observed that the service of outward transportation of finished goods is an acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 hearing who proceeded on the assumption that the assessable value of the said spare part was being determined under section 4 of the Central Excise Act, 1944. However, subsequent to the conclusion of hearing, the appellant vide their letter dated 16.09.2013 submitted that the spare parts were actually being assessed under section 4A of the Central Excise Act. However, it stands contended that even after deducting the amount of statutory abatement, the assessable value would be in excess of the total amount recovered by them from its dealers including the said courier charges and as such it can be safely conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 period prior to 01.04.08 is concerned, after considering the submissions from both the sides, we are of the view irrespective of the merits of the Appellant's case for this period, the longer limitation period under proviso to section 11 A(1) of Central Excise Act, 1944 would not be invokable, as during the period of dispute there were conflicting judgments on the point of admissibility of Cenvat Credit of Service tax paid on GTA Service availed for transportation of finished goods from the factory gate/depot to the customers' premises, inasmuch as while the Tribunal in case of Gujarat Ambuja Ceme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions 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 Section 4A or specific rate of duty. Further, when the same matter went up to Karnataka High Court. The Hon'ble High Court had made it clear in Para 15 and 16 that the expression 'place or removal' in its application is to be confined for the purpose of Section 4 only. Meaning thereby that the decision has no applicability in case of assessment under Section 4A and under specific rate of duty. 18. Now, next coming to the judgment of the Hon'ble Gujarat High Court, the issue again was never in relation to Section 4A of specific rate of duty. Further, the judgment of Hon'ble Punjab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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