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2017 (9) TMI 549 - AT - Central ExciseCENVAT credit - GTA service for outward transportation service - Held that - the goods in question cleared from the factory of the appellants to their packing plant, the appellant remained the owner of the said goods. And it is a fact that the cost of goods transportation agent services has been included in the assessable value of the goods, therefore, in the light of CBEC Circular No.97/8/07 dated 23.8.07, the appellant is entitled to avail cenvat credit - reliance placed in the case of COMMISSIONER OF C. EX. & CUSTOMS Versus PARTH POLY WOOVEN PVT. LTD. 2011 (4) TMI 975 - GUJARAT HIGH COURT , where it was held that By no stretch of imagination can it be stated that outward transportation service would not be a service used by the manufacturer for clearance of final products from the place of removal - appeal allowed - decided in favor of appellant.
Issues:
- Denial of Cenvat credit on outward transportation service for the period December 2007 to April 2008. Analysis: The appellant, engaged in manufacturing clinker and cement, availed Cenvat credit on outward transportation service for transporting loose cement from their factory to the packing unit. The Government notified cement under the 3rd Schedule for assessment under Section 4A of the Central Excise Act, considering activities like packing and labeling as manufacturing. However, during an audit, it was discovered that the appellant had availed Cenvat credit on service tax paid for outward transportation, leading to the issuance of show cause notices for the period in question. The denial of Cenvat credit on outward transportation service was based on the premise that the appellant's rate of duty specified the factory gate as the place of removal, as per the decision in Ultratech Cement Ltd. Vs. CCE, Raipur [2014 (307) ELT 3 (Chhattisgarh)]. The appellant contended that they were entitled to Cenvat credit on outward transportation service based on the decision of the Hon'ble Gujarat High Court in the case of ABB Ltd. [2011 (23) STR 97 (Kar)] for the period prior to April 1, 2008. They argued that post-April 1, 2008, the transportation cost was included in the assessable value of the goods, making them eligible for Cenvat credit. The appellant asserted that since the goods were sent to their packing plant and not sold, they should be allowed the credit. After considering the submissions from both sides, the Tribunal found that the appellant, as the owner of the goods cleared from the factory to the packing plant, was entitled to Cenvat credit on outward transportation service. The Tribunal referred to CBEC Circular No.97/8/07 and decisions of various High Courts, including the Hon'ble High Court of Karnataka in the case of ABB Ltd., to support the appellant's entitlement to Cenvat credit. The Tribunal also highlighted the ruling in Ultratech Cement Ltd. case, emphasizing that the factory gate is not always the place of removal when the duty is charged at a specified rate. Consequently, the impugned order denying Cenvat credit was set aside, and the appeal was allowed.
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