2013 (5) TMI 2 - HC - Central Excise

Application of waiver of pre-deposit as directed to deposit Rs.1 crore within a period of 8 weeks - benefit of the outward transportation denied on or after 01.04.2008 in view of the amendment in the Rules - as argued by assessee that the goods were to be delivered by the appellant F.O.R. and the place of removal of goods shall be the destination of the consumer - Held that - The question which arises for consideration in appeal before the Tribunal is whether the place of removal is the factory premises of the appellant or the point of delivery to the consumer. Such question is a disputed question of law and facts - No substantial question of law arises for consideration at the stage of waiver of pre deposit of the amount of duty. Grant four weeks time to the appellant to deposit the amount of Rs.1 crore as directed by the Tribunal.

Summary

Issues involved:
1. Interpretation of Rule 2(1)(ii) of the Cenvat Credit Rules regarding payment of service tax on outward transportation of goods.
2. Determination of the place of removal for the purpose of service tax on outward transportation of goods.
3. Consideration of whether a substantial question of law arises for consideration at the stage of waiver of pre-deposit of duty.

Analysis:
1. The judgment deals with the interpretation of Rule 2(1)(ii) of the Cenvat Credit Rules concerning the payment of service tax on outward transportation of goods by a cement manufacturer paying excise duty. The Tribunal granted benefit for goods transported till March 2008 but denied the benefit for goods transported after 01.04.2008 due to an amendment in the rules. The dispute revolves around the amendment's impact on the liability to pay service tax on outward transportation of goods.

2. The key issue in the appeal is the determination of the place of removal for the purpose of service tax on outward transportation of goods. The appellant argues that the place of removal is the destination of the consumer, while the respondent contends that it is the factory premises of the appellant based on the terms of the contract. The Court notes this as a disputed question of law and fact, indicating that the determination of the place of removal is crucial in deciding the liability for service tax on outward transportation of goods.

3. The Court considered whether a substantial question of law arises for consideration at the stage of waiver of pre-deposit of the duty amount. It was observed that the question of whether the place of removal is the factory premises or the consumer's destination involves legal and factual complexities. Consequently, the Court did not find any substantial question of law necessitating consideration at the pre-deposit stage. However, the appellant was granted additional time to deposit the directed amount of Rs.1 crore as per the Tribunal's order.

In conclusion, the judgment addresses the contentious issues surrounding the payment of service tax on outward transportation of goods, focusing on the interpretation of relevant rules and the determination of the place of removal. The decision emphasizes the complexity of the legal and factual aspects involved in such disputes, highlighting the need for a comprehensive analysis before reaching a final conclusion.