2015 (10) TMI 1813 - AT - Central Excise

Denial of CENVAT Credit - GTA Service - Held that - Appellant failed to produce any evidence that the goods were delivered on FOR basis and therefore, they are not eligible to avail CENVAT Credit of G.T.A. services, and denial of CENVAT Credit is justified. In my considered view, it is not the case of imposition of penalty of equal amount of duty as there is no suppression of fact with intent to evade payment of duty etc. Further, there were contrary views of various Benches of the Tribunal. So, the imposition of penalty under Section 11AC of Central Excise Act 1944 is unwarranted. So, the quantum of penalty is liable to be reduced. - Decided partly in favour of assessee.

Summary

Issues:
- Denial of CENVAT Credit on G.T.A. services
- Imposition of penalty under Section 11AC of Central Excise Act 1944

Analysis:
1. The appeal before the Appellate Tribunal CESTAT Ahmedabad pertained to the denial of CENVAT Credit amounting to Rs. 48,192.00 along with interest and penalty equivalent to the duty. The denial was based on the grounds that the appellant failed to provide evidence that the goods were delivered at the customer's premises, specifically related to G.T.A. services for the period from August 2011 to January 2012.

2. The learned Authorised Representative for the Revenue referred to a judgment by the Hon'ble Punjab & Haryana High Court in the case of M/s Ambuja Cements Vs Union of India, which established that CENVAT Credit on G.T.A. services cannot be availed unless it is proven that the goods were indeed supplied at the customer's premises. In this case, the appellant failed to produce evidence supporting delivery on FOR basis, leading to the justified denial of CENVAT Credit.

3. The Tribunal, after reviewing the impugned orders, concluded that there was a lack of evidence regarding the delivery of goods on FOR basis, justifying the denial of CENVAT Credit. However, the Tribunal also noted that there was no intent to evade payment of duty, leading to the decision that the penalty imposed under Section 11AC of the Central Excise Act 1944 was unwarranted. Additionally, considering the existence of contrary views among different Tribunal Benches, the Tribunal deemed the penalty amount excessive and reduced it to Rs. 5,000.00.

4. Consequently, the Appellate Tribunal modified the impugned order by reducing the penalty to Rs. 5,000.00 and partially allowed the appeal. The judgment highlighted the importance of establishing the delivery of goods at the customer's premises to avail CENVAT Credit on G.T.A. services, while also emphasizing the need for a balanced approach in imposing penalties under the relevant statutory provisions.