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TMI Blog2023 (12) TMI 1332X X X X Extracts X X X X X X X X Extracts X X X X ..... n. While referring the matter, the Division Bench observed as follows: "16. However, we find that on an identical issue, Hon'ble Single Member Bench of CESTAT Chennai in Final Order No.42569 - 42576/2017, dated 31.10.2017 and Hon'ble Division Bench of CESTAT, Chennai in Final Orders No.40440 - 40450/2019, dated 25.2.2019, remanded the matters back to the adjudicating authority to reconsider the issue afresh, deciding what is the place of removal in those cases. We respectfully disagree with these decisions and are of the view that once the Hon'ble Apex Court decided that the place of removal cannot be the buyer's premises in the case of ISPAT Industries Limited (supra) and has also decided that no CENVAT credit is admissible for outward transportation of goods to the buyer's premises in the case of Ultratech Cement Limited (supra), there is no scope for any other interpretation including by the adjudicating authority to decide the matter otherwise. In our view, the adjudicating authority cannot decide the place of removal in case of sale on FOR buyer's premises basis is the buyer's premises and that CENVAT credit on GTA services is available on outward transportation of goods fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvolving same issue and are awaiting the outcome of the present reference. Otherwise also, final disposal of the appeals, including the present one, would always be within the scope of the concerned referral Bench, after the reference is answered. Therefore, in our opinion, the reference needs to be answered as the reference involves a substantial question of law having wide implication on the pending cases. 6. Regarding the Miscellaneous Application, the learned counsel for the intervener submitted that the applicant should be heard on the reference, as appeals arising out of the same issue are pending before the Principal Bench of the Tribunal at Delhi and they would be affected by the outcome of the reference. Opposing the said application, the learned authorized representative for the department submitted that it is neither maintainable nor entertainable as the intervener is not aggrieved by the decision arising out of the Order-in-Appeal dated 30.11.2017. In support, he placed reliance on the order of this Tribunal in Karaikal Port Pvt. Ltd. vs. CCE, Puducherry [2016 (46) STR 695 (Tri. - Chennai)]. He further submitted that the order of the Tribunal in Kafila Hospitality & Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication observing that the applicant is not an aggrieved party under section 86 of the Finance Act, 1994. Thus, it was not a case where conflicting views were placed before the Larger Bench for resolution and the application filed by the intervener was rejected. 9. On the contrary, it is seen that a similar situation was considered by a Larger Bench of the Tribunal in Kafila Hospitality & Travels and after an analysis of the issue, it was observed as follows: "17. It is not in dispute that three appeals referred to in the intervention application are pending before Benches of the Tribunal at Mumbai and Chandigarh and also before Principal Bench of the Tribunal at New Delhi and that some of the issues referred to the Larger Bench also arise for consideration in these appeals. Any decision taken by the Larger Bench on these six issues that have been framed would necessarily have an impact on the appeals pending before the Division Benches. The submission made by Learned Authorized Representatives of the Department that only some of the issues referred to the Larger Bench may be involved in the appeal cannot be a ground to reject the intervention application. The Division Benche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he subsequent Circular dated 08.06.2018 issued by the Board and concluded: "9. In the last para of the Ultra Tech judgment the Hon'ble Apex Court has taken note of the changes in the amendment brought out in Rule 2(l) of Cenvat Credit Rules which would be effective from 01.04.2008, where the words from the "place of removal‟ was substituted by "upto the place of removal‟. The Apex Court has held that GTA Services availed for transportation of goods from the place of removal to buyer's premises was not admissible. Prima facie, there should not be any confusion after this judgment with regard to place of removal for availment of Cenvat credit, since the Hon'ble Apex Court 7 E/40287/2015& 10 Ors. has very clearly used the words place of removal related to buyer's premises. ***** 11. We take notice of the fact that after issuance of the Circular dated 8/6/2018, the Tribunal has decided several cases by remanding the matter to look into the question as to which is the place of removal for the assessee. Few of the cases are listed below:- (i) CCE v. M/s. Kirloskar Engines India Ltd [2018 (10) TMI 1642 CESTAT-Ahmedabad] (ii) M/s. Balaji Multiflex (P) Ltd. v. CCE [2018 (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 006 (1) SCC 275 (SC)]. 13. Further, referring to the Circular dated 8.6.2018 issued by the Board subsequent to the judgment of the Supreme Court in Ultratech Cements, he submitted that the said Circular considered the law laid down by the Supreme Court on the issue and after analyzing it clarifies the position of law relating to place of removal, which is illustrated in paragraph 4.1 of the said Circular. Therefore, it becomes imperative to determine whether a case would fall under the exception provided under paragraph 4(i) of the 2018 Circular to determine the eligibility of CENVAT credit on outward GTA service having regard to the facts of each case. Further, he submitted that paragraph 5 of the Circular reiterates the law laid down by the Supreme Court in Ultratech Cements wherein it has been held that CENVAT credit on GTA service for transport of goods from the place of removal to buyers' premises was not admissible for the relevant period. It is his contention that there is no conflict between paragraphs 4 and 5 of the said Circular and it has to be read harmoniously as they operate under different factual circumstances. He further submitted that subsequent to the decision i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the place of removal is wholly unjustified and unwarranted in the facts and circumstances of the case. 16. The above reference which germanes from the difference of opinion between two Benches, centers around the issue of admissibility of CENVAT credit on GTA service i.e., "outward transportation of finished goods up to the place of delivery, for the period after 01.04.2008 in the light of the judgment of the Supreme Court in Ultra Tech Cement and the Circular dated 08.06.2018 of the Board. 17. To appreciate the issue, it is necessary to state the facts of Excise Appeal No. 40575 of 2018 filed by the appellant. The appellant is engaged in the manufacture of cement falling under Chapter sub-heading 2573 29 30 of the Central Excise Tariff Act, 1985 [the Excise Tariff Act]. The goods are assessed to specific rate of duty based on the Maximum Retail Price (MRP) printed on the bags as required under the Standard of Weights and Measures Act, 1976. They had been availing CENVAT credit of Central Excise duty paid on inputs, capital goods and input services and utilized the same towards discharge of Central Excise duty on the final product. CENVAT credit was proposed to be denied, int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee; Explanation. - For the purpose of this clause, sales promotion includes services by way of sale of dutiable goods on commission basis." 19. The said definition has been analyzed by the Supreme Court in Ultatech Cement. Taking note of the pre and post amendment of the definition of 'input service' and the Circular issued by Board, the Supreme Court observed: "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) S.T.R. 364 (Tri.- Ahd.). Those judgments, obviously, dealt with unamended Rule 2(l) of Rules, 2004. The three conditions which were mentioned explaining the 'place of removal' as defined under Section 4 of the Act, there is no quarrel upto this stage. However, the important aspect of the matter is that Cenvat Credit is permiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roversy is to ascertain the 'place of removal' for the purpose of allowing credit on the GTA service. 22. After the judgment of the Supreme Court in Ultratech Cements, the Board issued a Circular on 08.6.2018 clarifying the applicability of principles laid down by the Supreme Court in Ultratech Cements by the field formation. The said Circular reads as follows: " 'Place of Removal' under Section 4 of Central Excise Act, 1944, Cenvat Credit Rules, 2004 and Cenvat Credit Rules, 2017 - Clarification Circular No. 1065/4/2018-CX., dated 8-6-2018 F. No. 116/23/2018-CX-3 Government of India Ministry of Finance (Department of Revenue) Central Board of Indirect Taxes & Customs, New Delhi Subject : 'Place of Removal' under Section 4 of the Central Excise Act, 1944, the CENVAT Credit Rules, 2004 and the CENVAT Credit Rules, 2017 - Regarding. Attention is invited to Boards Circular No. 97/8/2007-CX., dated 23-8-2007 [2007 (215) E.L.T. (T24)], 988/12/2014-CX., dated 20-10-2014 [2014 (309) E.L.T. (T3)] and 999/6/2015-CX., dated 28-2-2015 [2015 (317) E.L.T. (T7)]. Attention is also invited to the judgment of Hon'ble Supreme Court in the case of CCE v. M/s. Roofit Industries Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m where excisable goods are to be sold can only be manufacturer's premises or premises referable to the manufacturer. If we were to accept contention of the revenue, then these words will have to be substituted by the words "have been sold" which would then possibly have reference to buyer's premises." 4. Exceptions: (i) The principle referred to in para 3 above would apply to all situations except where the contract for sale is FOR contract in the circumstances identical to the judgment in the case of CCE, Mumbai-III v. Emco Ltd. - 2015 (322) E.L.T. 394 (S.C.) and CCE v. M/s. Roofit Industries Ltd. 2015 (319) E.L.T. 221 (S.C.). To summarise, in the case of FOR destination sale such as M/s. Emco Ltd. and M/s. Roofit Industries where the ownership, risk in transit, remained with the seller till goods are accepted by buyer on delivery and till such time of delivery, seller alone remained the owner of goods retaining right of disposal, benefit has been extended by the Apex Court on the basis of facts of the cases. (ii) Clearance for export of goods by a manufacturer shall continue to be dealt in terms of Circular No. 999/6/2015-CX., dated 28-2-2015 as the judgments cited above d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made to the judgment of the Supreme Court in Ultratech Cements and it is stated that the appeal of the department was allowed by the Supreme Court holding that CENVAT credit on goods transport agency service availed for transport of goods from the place of removal to the buyers' premises was not admissible for the relevant period. After amendment, it was held that the service is treated as an input service only up to the place of removal. The Circular has issued an advice that the facts have to be verified in the light of the principles stated in the said Circular. 25. Thus, it is crucial to understand and apply the principle laid down by the Supreme Court in Ultratech Cement. In understanding the ratio of a judgment, the observation of Supreme Court in Collector of Central Excise, Calcutta vs. Alnoori Tobacco Products [2004 (170) ELT 135 (SC)], later followed in Escorts Ltd. vs. CCE, Delhi-II [2004 (173) ELT 113 (SC)] would be relevant. Commenting on the methodology of interpretation and understanding a judgment of the Supreme Court, their Lordships held as follows: "11. Courts should not place reliance on decisions without discussing as to how the factual situation fits in wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of one case against the colour of another. To decide therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive.'' 26. The Supreme Court in State of Orissa vs. Md. Illiyas [(2006) 1 Supreme Court Cases 283] also laid down the guidelines to follow the precedent. Their Lordships at paragraph 12 observed as follows: "12. When the allegation is of cheating or deceiving, whether the alleged act is wilful or not depends upon the circumstances of the concerned case and there cannot be any strait jacket formula. The High Court unfortunately did not discuss the factual aspects and by merely placing reliance on earlier decision of the Court held that pre-requisite conditions were absent. Reliance on the decision without looking into the factual background of the case before it is clearly impermissible. A decision is a precedent on its own facts. Each case presents its own features. It is not everything said by a Judge while giving judgment that constitutes a precedent. The only thing in a Judge's decision binding a party is the principle upon which the case is decided and for this reason it is important to analyse a decision and isolat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f CGST & Central Excise, Jaipur vs. ARL Infratech Ltd. [2019 (369) E.L.T. 351 (Raj.)], in judgments delivered on the same date i.e., on 19.09.2018, following the judgment in Ultratech Cements held that credit would not be admissible on GTA service for delivery of goods at the buyers' premises. In the both these cases, the Circular issued by the Board was not considered. 29. The judgment of the High Court of Rajasthan in Mangalam Cements was carried in appeal before the Supreme Court. The Supreme Court set aside the order of the Rajasthan High Court reported as Mangalam Cement Ltd. vs. Commissioner [2020 (32) GSTL J 156 (SC)] and observed as follows: "In our opinion, the High Court ought to have analyzed the relevant facts and contentions raised in the subject appeal(s) on its own merit and ought not to have disposed of the same by a general observation, as is noticed from the analysis in the impugned judgment. Relevant portion of the impugned judgment reads as under: "On hearing Learned Counsel for the parties and perusing the material on record, we find that in view of the amended definition of "input service" w.e.f. 1-3-2008 as also in the light of judgment of the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the buyer had no right over the goods till delivered to it. The Tribunal has not considered this aspect and has only relied on the amendment made to the definition of "input service" with effect from 1-4-2008 and rejected the claim of the appellant-assessee after that date. No further reason has been given by the Tribunal nor any finding has been recorded with regard to place of completion of sale of the goods. 12. Since we are of the opinion that the sale had concluded only after the delivery of the goods was made at the address of the buyer, in the facts of the present case the appellant-assessee would be entitled to the benefit of Cenvat credit on Service Tax paid on outward transportation of goods by the assessee even after 1-4-2008. The appellant-assessee would thus be entitled to such benefit for the period 1-4-2008 to 31-7-2008 which has been denied to it by the authorities below. 13. For the forgoing reasons, this appeal stands allowed. The question of law is answered in favour of the assessee and against the Revenue. The order of the Tribunal to the extent of disallowing Cenvat credit to the appellant for the period after 31-3-2008 is quashed." 17. The Ministry of F ..... X X X X Extracts X X X X X X X X Extracts X X X X
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