TMI Blog2018 (11) TMI 1035X X X X Extracts X X X X X X X X Extracts X X X X ..... n nature 2. The appellant is in appeal against the impugned order where the Cenvat Credit has been denied to them towards outward transportation charge under GTA service for the period in January, 2005 to December, 2011 and July, 2013 to February, 2016. 3. The brief facts of the case are that the appellant is engaged in the manufacture of cement and clinker falling under chapter heading 25 of the First Schedule to the Central Excise Tariff Act,1985, and sales their cement/clinker from their factory to both the dealers as well as to the various institutional buyers. When these goods are sold to these dealers and institutional buyers, the freight and transportation charges are borne by the appellant which is on FOR basis. The proceedings were initiated against the appellant by issuing of the various Show Cause Notices on the ground that the place of removal for the clearance of goods are only factory gate /depot and not beyond that, and hence the Cenvat Credit availed on GTS service is not admissible as it does not qualifies as input service, defined under Rule 2 (l) of Cenvat Credit Rules, 2004. 4. In respect of Appeal No. E/50161/2018, this is the second round of litigatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cular is as under : ISSUE : Up to what stage a manufacturer/consignor can take credit on the service tax paid on goods transport by road? COMMENTS: This issue has been examined in great detail by the CESTAT in the case of M/s. Gujarat Ambuja Cements Ltd. vs. CCE, Ludhiana [2007 (6) S.T.R. 249 (Tri-D)]. In this case, CESTAT has made the following observations :- the post sale transport of manufactured goods is not an input for the manufacturer/consignor. The two clauses in the definition of input services‟ take care to circumscribe input credit by stating that service used in relation to the clearance from the place of removal and service used for outward transportation upto the place of removal are to be treated as input service. The first clause does not mention transport service in particular. The second clause restricts transport service credit upto the place of removal. When these two clauses are read together, it becomes clear that transport service credit cannot go beyond transport upto the place of removal. The two clauses, the one dealing with general provision and other dealing with a specific item, are not to be read disjunctively so as to bring ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m. However, there may be situations where the manufacturer /consignor may claim that the sale has taken place at the destination point because in terms of the sale contract/agreement (i) the ownership of goods and the property in the goods remained with the seller of the goods till the delivery of the goods in acceptable condition to the purchaser at his door step; (ii) the seller bore the risk of loss of or damage to the goods during transit to the destination; and (iii) the freight charges were an integral part of the price of goods. In such cases, the credit of the Service Tax paid on the transportation up to such place of sale would be admissible if it can be established by the claimant of such credit that the sale and the transfer of property in goods (in terms of the definition as under Section 2 of the Central Excise Act, 1944 as also in terms of the provisions under the Sale of Goods Act, 1930) occurred at the said place. 11 . As can be seen from the reading of the aforesaid portion of the circular, the issue was examined after keeping in mind judgments of CESTAT in Gujarat Ambuja Cement Ltd., 2007 (6) S.T.R. 249 (Tribunal) and M/s. Ultratech Cement Ltd., 2007 (6) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13 August 2007 India Cement Limited vs. CCE, 2007 (8) S.T.R. 43(Tri.-Bang) The Tribunal disagreed with the interpretation taken by the Division Bench in Gujart Ambuja (Supra) and referred the matter to the Larger Bench. 23 August 2007 The Department issued a circular which stated that the credit of service tax paid on transportation up to place of sale is admissible on fulfilment of conditions mentioned in the circular. 1 April 2008 Rule 2(l) of the Credit Rules, 2004 was amended and the phrase from the place of removal was substituted to upto the place of removal . 10 February 2009 Ambuja Cement Ltd. vs Union of India, 2009 (236) E.L.T. 431(P H) The Hon ble Punjab and Haryana High Court overruled the decision in Gujrat Ambuja Cement(supra) 18 May 2009 ABB Ltd. vs. CCE, 2009 (15) S.T.R. 23(Tri-LB) The Larger Bench held that transportation of final product must be considered in light of the requirement of the business. 15 June 2009 The Depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17 January 2018 CCE, Belgaumn vs. Vasavadatta Cement Ltd., 2018(11)GSTL 3(SC) The Hon ble Supreme Court held that the credit would be admissible for the period prior to the amendment in 2008 -01 February 2018 CCE ST vs. Ultratech Cement Ltd. 2018(9) GSTL 337(SC) The Hon ble Supreme Court held that credit is inadmissible for the period after the amendment in 2008 05 February 2018 Commissioner vs. The Andhra Sugar Ltd., 2018 TIOL 45 SC CX The Hon ble Supreme Court held that the credit would be admissible for the period prior to the amendment in 2008 8. Ld. Ld. Advocate further submitted that the various decisions of High Courts and Tribunal, were also in the favour of appellant, and therefore, in such a circumstances it cannot be held that the appellant had any malafide intention to avail the Cenvat Credit GTA service, on reliance was placed on decision of Continental Foundation JT. Venture v. CCE, Chandigarh, 2007 (216) ELT 177(SC) 9. On the other hand, the Ld. AR defended the impugned order. 10. After going thr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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