2013 (12) TMI 514 - AT - Central Excise

Admissibility of cenvat credit on outward transportation charge Goods delivered at customer s premises Held that - Outward transportation charges upto a customers premises, can be treated as eligible input services provided it fulfills the various criterias laid down under Cenvat Credit Rules, 2004 and Section 4 of the Central Excise Act, 1944 Relying upon AMBUJA CEMENTS LTD. Versus UNION OF INDIA 2009 (2) TMI 50 - PUNJAB & HARYANA HIGH COURT and the Board s Circular No.97/8/2007-ST dated 23.08.2007 held that for a manufacturer/consignor, the eligibility to avail credit of the service tax paid on the transportation during removal of excisable goods would depend upon the place of removal as per the definition of place of removal under section 4 of the Central Excise Act, 1944 - the credit on the outward freight could be admissible provided the respondent fulfill all the conditions laid down in Boards Circular. Power to remand back by the Commissioner (Appeals) Held that - Following MIL INDIA LTD. Versus COMMISSIONER OF C. EX., NOIDA 2007 (3) TMI 8 - SUPREME COURT OF INDIA and Commissioner of Central Excise, Noida v. Orient Crafts Ltd. 2010 (11) TMI 178 - CESTAT, DELHI - The Commissioner (Appeals) has no power to remand the case back to the adjudicating authority after deletion of that power from Section 35A (3) of the Central Excise Act, 1944 by amendment made by the Finance Act, 2001.

Summary

Issues:
1. Admissibility of cenvat credit on outward transportation charges for delivery of goods to customer's premises.
2. Power of Commissioner (Appeals) to remand the case back to the lower adjudicating authority.

Analysis:

Admissibility of Cenvat Credit:
The dispute revolves around the eligibility of cenvat credit on outward transportation charges up to the customer's premises. The Tribunal examined the definition of 'input service' under Rule 2(l) of Cenvat Credit Rules, 2004, which includes outward transportation up to the place of removal. The term 'place of removal' is defined in Section 4 of the Central Excise Act, 1944, indicating that transportation charges to a customer's premises can be considered eligible input services if they meet the criteria under the rules and the Act. The Tribunal also referenced a Board Circular stating that eligibility for availing credit on transportation during removal of excisable goods depends on the place of removal as per the Act. The Tribunal upheld the Commissioner (Appeals) decision that the credit on outward freight could be admissible if all conditions laid down in the Board's Circular are fulfilled.

Power of Commissioner (Appeals) to Remand:
The Tribunal deliberated on the issue of whether the Commissioner (Appeals) has the authority to remand a case back to the lower adjudicating authority. Citing various judgments, including MIL India Ltd. Vs. CCEx., Noida, the Tribunal noted that the power of remand by the Commissioner (Appeals) has been removed from Section 35A(3) of the Central Excise Act, 1944. Referring to a Tribunal case involving service tax, it was established that the Commissioner (Appeals) lacks jurisdiction to remand a matter and must decide it independently. Despite acknowledging the lack of power to remand, the Tribunal agreed with the Commissioner (Appeals) findings and remanded the case to the lower authority for reconsideration, emphasizing that all issues remain open for review and granting a fair hearing to the respondents.

In conclusion, the Tribunal ruled in favor of the respondent regarding the admissibility of cenvat credit on outward transportation charges, subject to fulfilling specified conditions. Additionally, it clarified the limitations on the Commissioner (Appeals) authority to remand a case, directing a fresh examination by the lower adjudicating authority while ensuring a fair hearing for all parties involved.