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Commissioner of Central Excise (Appeals) Ahmedabad-III Versus Lao More Biscuits Pvt Ltd

2016 (9) TMI 100 - CESTAT AHMEDABAD

Job work - Cenvat credit - Service tax paid on outward freight charges (GTA services) - for transporting the manufactured biscuits from their factory to the depots of M/s PPPL - Held that:- it is found that there is an arrangement/agreement between the Assessee and M/s Parle Products Pvt. Ltd had been in existence for manufacture of biscuits on job work basis and transportation of the manufactured biscuits to their various depots. Therefore, the judgment of Tribunal in the case of M.P. Biscuits .....

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the biscuits are assessable to Section 4A, hence the place of removal ought to be considered as factory gate, relying on the judgment of this Tribunal in Ultratech Cement Ltd case, cannot be considered a good law, as the said judgment was not accepted by Hon'ble Chhatisgarh High Court in their order dt.05.08.2014 reported as Ultratech Cement Ltd. Vs. Commissioner of Central Excise, Raipur [2014 (8) TMI 788 - CHHATTISGARH HIGH COURT]. Besides, the said judgment was rendered relating to the perio .....

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r to 01.04.2008. - Decided against the Revenue - E/1061/2007-SMC, E/1062/2007-SMC, E/648/2008-SMC, E / 59 / 2010-SMC, E / 60 / 2010-SMC - Order No. A/10793-10797/2016 - Dated:- 31-8-2016 - Hon ble Dr. D.M. Misra, Member (Judicial) For Assessee: Ms.Aparna Hirangadi, Advocate For Revenue: Shri G.P. Thomas, A.R. ORDER Per Dr. D. M. Misra From the above mentioned appeals, 3 appeals viz. E/1061-1062/2007-SM and E/648/2008-SM have been filed by the Assessee-Appellant and remaining two appeals viz. E/5 .....

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packing material supplied by M/s Parle Products Pvt. Ltd (herein after called as M/s PPPL) as per the Agreement between the Appellant- assessee and M/s PPPL. The Assessee had availed CENVAT Credit on inputs, capital goods and Input services i.e inward and outward freight (GTA Service) on transport of goods by road and utilized the said credit towards payment of Central Excise duty on the manufactured biscuits on behalf of M/s Parle Products Pvt. Ltd. Show cause cum demand notices were issued fro .....

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icating Authority, appeals had been filed by the assessee before the Ld. Commissioner (Appeals), who rejected the same for non-compliance with the provisions of Section 35F of Central Excise Act, 1944. Hence, on further appeal before this Tribunal, the Appeals were remanded to the learned Commissioner (Appeals) for reconsideration of the issues afresh on merit in the light of the decision of Larger Bench of the Tribunal in ABB Ltd. Vs. Commissioner of C.E & S.T Bangalore 2009 (15) STR 23(Trb .....

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e said agreement that the Assessee would be required to deliver the manufactured biscuits at various depots of M/s Parle Products Pvt. Ltd located all over the country and also they were required to pay Excise duty on the price declared by M/s PPPL. In compliance with the conditions of Notification No.36/2001 CE(NT) dt. 26.06.2001 an authorization and joint declaration dt.15.09.2001 enclosing therewith the copy job work agreement was addressed to the Superintendent, Central Excise, Range-I, Divi .....

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umstances in the case of M.P. Biscuits Pvt. Ltd Vs CCE Allahabad 2012 (282) ELT 563 (Tri-Del) and CCE Indore Vs Dhananjay Confectionary (P) Ltd 2010 (20) STR 696 (Tri-Del). She has also submitted that the period involved in the present Appeals was from August 2005 to February 2007 i.e. prior to the amendment to the definition of input service prescribed under Rule 2(l) of CENVAT Credit Rules 2004 w.e.f 01.04.2008, hence the Service Tax paid on outward freight from the place of removal i.e. from .....

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of Service Tax paid on inward freight as well as outward freight during the relevant period. Revenue has come in appeal on the grounds that there has been no arrangement/agreement between the Assessee and M/s PPPL to discharge the Service Tax on the said GTA service and the Larger Bench judgment in ABB Ltd. s case has not been accepted by the Revenue. She submitted that specific agreement between the Assessee and M/s PPPL has been made in this regard which has been communicated to the Range Supe .....

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ase of Kohinoor Biscuit Products Vs CCE Noida 2015 (37) STR 567 (Tri-Del). It is his contention that therefore, the Service Tax paid on outward freight from the factory gate to the depots of M/s Parle Products Pvt. Ltd is not eligible as CENVAT Credit to the assesse-appellant. 6. In her rejoinder, the learned Advocate for the Assessee has submitted that since the period involved in Kohinoor Biscuit Product s case was November 2009 to October 2011, i.e. after amendment to the definition of input .....

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641 (Chhatisgarh), held that the place of removal has to be decided in the facts and circumstances of each case, hence, the presumption of the Tribunal that place of removal is factory gate in the case of Excise duty charged at specific rate, is incorrect. 7. I have carefully considered the submissions advanced by both sides and perused the records. The dispute which needs to be addressed is: whether the Assessee, a job worker of M/s PPPL, is eligible to CENVAT Credit, on Service Tax paid on ou .....

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t.15.09.2001 duly communicated to the Range Superintendent in consonance with Notification No.36/2001 CE(NT) dt.26.06.2001. Also, it is not in dispute that the period in all these appeals was prior to 01.4.2008. This Tribunal in similar facts circumstances in M.P. Biscuits Pvt. Ltd. s case(supra), after analyzing the relevant agreement, observed as follows:- 11. Reading of above provision clearly show that outward transportation of the manufactured product up to the place of removal falls within .....

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to various depots of PBPL located all over the country as directed by PBPL. From the above stipulation in the contract, appellants were under obligation to transport biscuits to various depots of PBPL as such obviously the place of removal was/were depots where the appellant was required to supply manufactured biscuit as per direction of the appellant. Admittedly, the appellants have transported the goods to the depots/premises of the principal manufacturer and paid transportation charges inclu .....

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nd M/s Parle Products Pvt. Ltd had been in existence for manufacture of biscuits on job work basis and transportation of the manufactured biscuits to their various depots. Therefore, the aforesaid judgment is squarely applicable to the facts of the case. . I also find that the duty paid on input raw materials and packaging materials by M/s PPPL which was supplied for conversion into biscuits were availed as credit by the assessee and there is no dispute in this regard. I find force in the argume .....

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of Central Excise, Raipur 2014 (35) STR 641(Chattishgarh). Besides, the said judgment was rendered relating to the period 2009, that is, after amendment to the definition of input service w.e.f. 01.4.2008. 9. Also, it is crystal clear from the judgment of the Hon ble Gujrat High Court in Parth Polywoven Pvt. Ltd. s case(supra) that cenvat credit on GTA service(out ward freight ) from the place of removal to the purchaser s premises prior to 01.04.2008 was admissible. Interpreting the scope of me .....

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of final products and clearance of final products from the place of removal. This definition itself is wide in its expression and includes large number of services used by the manufacturer. Such service may have been used either directly or even indirectly. To qualify for input service, such service should have been used for the manufacture of the final products or in relation to manufacture of final product or even in clearance of the final product from the place of removal. The expression in r .....

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tilized by the manufacturer. By no stretch of imagination can it be stated that outward transportation service would not be a service used by the manufacturer for clearance of final products from the place of removal. 19. When we hold that outward transportation would be an input service as covered in the expression means part of the definition, it would be difficult to exclude such service on the basis of any interpretation that may be offered of the later portion of the definition which is cou .....

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ovided in the main body of the definition. To our mind this was also not the intention of the Legislature in the present case. 20. There, of course, are certain areas which still remain to be cleared. It was vehemently contended before us by the counsel for the Revenue that later portion of the definition which provides for the inclusion clause limits the outward transportation service up to the place of removal. That being so, according to them, the outward transport service utilized by the man .....

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part of the definition would permit us to exclude such a service form the sweep of the definition. Secondly, we notice that the definition of the term input service came to be amended with effect from 1-4-08 and instead of words clearance of final products from the place of removal , the words clearance of final products upto the place of removal came to be substituted. What would be the position if the case had arisen after 1-4-2008 is a situation we are not confronted with. We, therefore, refr .....

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