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2016 (5) TMI 781 - CESTAT KOLKATA

2016 (5) TMI 781 - CESTAT KOLKATA - 2016 (45) S.T.R. 256 (Tri. - Kolkata) - Admissibility of Cenvat credit - Job-work - GTA service tax paid when goods are manufactured by the job worker and cleared on payment of duty from the factory premises of job worker - Cenvat credit taken by the Respondent for the freight paid by them upto the factory premises of job worker while sending raw materials and also freight charges paid by Respondent from the job workers to the Depots of the Respondent while se .....

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nufacturers and two place of removals for the same goods. - Demand - Invokation of extended period of limitation - Rule-14 of CCR, 2004 read with proviso to section 11A(1) of the Central Excise Act, 1944 - Held that:- the matter is of interpretation of provisions of CCR, when a part of the service tax credit has been held to be admissible to the Respondent, therefore, extended period of 5 years cannot be invoked and demand has to be restricted to the normal period of limitation with respect .....

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r the Respondent : Sri Arnab Chakraborty and Sri K.N.Ramanathan, Advocate ORDER Per Sri H.K.Thakur 1. This Appeal has been filed by the Revenue against Order-in-Appeal No.138/JSR/2013 dated 13.06.2013 passed by the Commissioner (Appeals), Ranchi as First Appellate Authority. Cross objection No. CO-75375/2014 has also been filed by the Respondent in support of Order-in-Appeal dated 13/6/2013 passed by the first appellate authority. 2. Sri S.S.Chatterjee, Supt.(AR) appearing on behalf of the Reven .....

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ers. That service tax on freight so paid by the Respondent is taken as Cenvat Credit by Respondent when final goods manufactured discharge duty at the time of clearance by the job workers. That three demand show cause notices were issued to the Respondent, for the period October, 2006 to March, 2012, for denying service tax credit on freight paid by the Respondent under Rule 15(2) of the Cenvat Credit Rules, 2004(CCR). The show cause notices were confirmed, alongwith interests, and equivalent pe .....

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ppellate Authority, credit of service tax was allowed only to the job worker and not the principal manufacturer. Learned A.R. also relied upon the case law Lotte India Corporation Ltd. vs. Commr. Of C.Ex., Pondicherry [2015(37) S.T.R. 876 (Tri.-Chennai)] where such credit was disallowed. It is thus the case of the Revenue to restore Order-in-Original passed by the Adjudicating Authority by setting aside Order-in-Appeal dated 13.03.2013 passed by the First appellate Authority. 3. Sri Arnab Chakra .....

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where the goods are sold to the ultimate customers is the place of removal and all services availed upto the depot is admissible as Cenvat credit to the appellant. Learned Advocate relied upon the case law of CCEVs. Ultratech Cement Ltd. [2010 (260) ELT 369-para 28]. (ii) That Respondent remain manufacturer and owner of the finished goods as principal manufacturer as per Rule 10A of the Central Excise (Determination of price of Excisable goods) Rules, 2000. (iii) That as per case law Ultratech C .....

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in view of the other case laws relied upon. (v) That extended period of 5 years limitation for demanding duty and imposition of penalty under Rule 15 (2) of Cenvat credit Rules, 2004 are not attracted as there are conflicting views on the issue of admissibility of credit to the Respondent. 4. Heard both sides and perused the case records. The issue involved in the present proceedings is whether Cenvat credit is admissible to the Respondent for the GTA service tax paid by Respondent when goods a .....

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of services can be availed by a manufacturer upto the place of removal. Rule 4 (5) (a) of CCR provides for removal of inputs for further manufacture if the intermediate goods are received back within 180 days. Rule 4 (5) (b) of CCR provides for clearance of goods manufactured to be cleared from job workers premises, subject to permission from the jurisdictional DC/AC on payment of duty. The word manufacturer has not been defined in CCR but the same has to be construed from the definition of .....

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ufacture or production of goods on behalf of a principal manufacturer from any inputs or goods supplied by the said Principal manufacturer or by any other person authorized by him . Job work as defined in para 2 (n) of the Cenvat credit reads as follows: (n) job work means processing ort working upon of raw material or semi-finished goods supplied to the job worker, so as to complete a part or whole of the process resulting in the manufacture or finishing of an article or any operation which is .....

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Act, 1985 (5 of 1986) as amounting to 16[manufacture or] 17[(iii) which, in relation to the goods specified in the third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer,] And the word manufacturer shall be construed accordingly and shall include not only a person wh .....

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volves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer,] And the word manufacturer shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or man .....

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lusive definition of manufacturer contained in section 2 (f) of Central Excise Act, 1944, even if the goods are actually manufactured by a job worker. However, under a given situation either job worker or the principal manufacturer has to be treated as a manufacturer . The conclusive factor for treating either job-worker or the principal manufacturer for the purpose of taking Cenvat Credit is thus the person who decides to pay Central Excise duty. In the present proceedings it is the job worker .....

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goods have been permitted to be deposited without payment of duty; (iii) a depot, premises of consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory from where such goods are removed.] However, this definition is made effective from 11/7/2014 and was inserted as per Notification No. 21/2014 -CE(N.T.) dated-11/7/2014. The period of demand in the present proceeding is from October, 2006 to March, 2012. The definition o .....

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for the same goods. In the present factual matrix, the place of removal has to be related to the job worker as the manufacturer and the job worker decided to pay duty at the factory gate. The place of removal has to be considered as the factory gate of the job worker who decided to discharge duty . Cenvat credit of services as per the definition of Input services given in Rule 2 of the CCR has to be restricted upto the place of removal. The depots of the Respondent cannot be considered as the p .....

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oods for which Cenvat credit of input services was taken. Neither did the appellant pay excise duty on such goods. Both manufacturing and duty payment were done by job workers. In such a situation there is no justification to consider the appellant as manufacturer for the purpose of taking Cenvat credit in respect Service Tax paid on transportation of inputs and final products. In the various decisions relied upon by the appellant the assesse has done either a part of the manufacturing activity .....

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