2013 (11) TMI 1175 - AT - Central Excise

Cenvat Credit on inputs and capital goods - Service Tax paid on input services Place of Removal - Insurance of the goods during transit - Whether they would be eligible for Cenvat Credit of Service Tax paid on transit insurance premium in respect of insurance of the goods during transit from the factory to the customer s premises Held that - The rate of duty on sugar, is specific - The definition of place of removal as given in Section 4(3)(c) of Central Excise Act, 1944, which as stated in Section 4(3) itself, is for the purpose of the section, would not be applicable and the natural meaning of this term i.e. the place on removal from which the duty is liable to be paid in terms of Rule 4 of the Central Excise Rules,2002, would have to be adopted and on this basis the place of removal , would be the factory gate, not the customer s premises. Following LAFARGE INDIA PVT. LTD. Versus COMMISSIONER OF CENTRAL EXCISE, RAIPUR 2013 (9) TMI 243 - CESTAT NEW DELHI - Appellant have not been able to establish prima facie case Appellant directed to pay an amount of Rs. Sixty thousand as Pre-deposit upon such submission rest of the duty to be waived till the disposal Partial stay granted.

Summary

Issues: Eligibility for Cenvat Credit of Service Tax paid on transit insurance premium.

Analysis:
The appellant, a sugar manufacturer, availed Cenvat Credit of Central Excise Duty and Service Tax paid on inputs and services. The dispute arises from the eligibility of Cenvat Credit for Service Tax paid on transit insurance premium during the transportation of goods. The Department contended that the transit insurance premium cannot be treated as an input service. The Assistant Commissioner confirmed the Cenvat Credit demand, and penalties were imposed. The Commissioner (Appeals) reduced the demand and penalties but upheld a portion. The appellant argued that their sales were on FOR destination basis, satisfying the criteria set by the Board, making the customer's premises the 'place of removal.' The appellant sought a waiver of pre-deposit for the appeal hearing, which was opposed by the Department. The Tribunal noted that the duty on sugar was specific, and the 'place of removal' would be the factory gate, not the customer's premises. The Tribunal directed the appellant to pay a specific amount within a stipulated period, failing which the pre-deposit requirement for the remaining amount would be waived, and the recovery stayed.

This judgment delves into the interpretation of 'place of removal' concerning the eligibility of Cenvat Credit for Service Tax paid on transit insurance premium. The appellant's argument regarding sales on FOR destination basis and the Department's contention were thoroughly examined. The Tribunal's analysis of the specific duty on sugar and the 'place of removal' being the factory gate significantly impacted the decision. The requirement for pre-deposit and the subsequent waiver based on compliance within the stipulated period were crucial aspects of the judgment, ensuring a balanced approach in addressing the dispute. The reference to the Tribunal judgment in the Lafarge India Pvt. Ltd. case added precedential value to the decision, reinforcing the legal reasoning behind the ruling. Overall, the judgment provides a detailed analysis of the issues involved, clarifying the interpretation of relevant legal provisions and setting a precedent for similar cases in the future.