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2017 (10) TMI 282 - AT - Central ExciseCENVAT credit - outward transportation of goods - time limitation - Held that - Circular dated 23/08/2007 clearly prescribed that under certain circumstances, the appellants are entitled to credit of Cenvat on outward GTA service availed by them. Respondents have claimed that based on the bonafide belief on the said clarification. There is merit in the arguments of the respondents that they could have formed a bonafide belief on the basis of said circular and therefore, extended period of limitation cannot be invoked. Revenue has failed to point out as to which column of ER-1 return mandate declaration of service on which credit is taken. In the absence of that assertion made by the Revenue cannot be sustained. Appeal dismissed - decided against Revenue.
Issues:
Appeal against Commissioner (Appeals) order setting aside demand of reversal of Cenvat Credit on service tax paid on outward transportation of goods due to limitation. Analysis: The appeal filed by the Revenue challenges the order of the Commissioner (Appeals) that set aside the demand for reversal of Cenvat Credit on service tax paid for outward transportation of goods due to limitation. The Revenue argued that while the impugned order favored them on merits, the demand was dropped solely based on limitation. The argument centered around a Circular issued by the CBEC, which stated that in case of any inconsistency between the Circular and the Act or rules, the latter shall prevail. The Circular clarified the scope of taking credit on service tax paid on outward transportation of goods up to the place of removal, as highlighted in previous cases such as M/s Gujarat Ambuja Cements Ltd. v. CCE, Ludhiana and M/s. Ultratech Cements Ltd v. CCE., Bhavnagar. The interpretation emphasized that transport service credit cannot extend beyond transport up to the place of removal, as defined under the Central Excise Act, 1944. The argument further delved into the definition of "place of removal," which plays a crucial role in determining the eligibility of a manufacturer/consignor to avail credit of service tax paid on transportation during the removal of excisable goods. The determination of the place of removal is essential, especially in cases where the sale is claimed to have occurred at the destination point based on contractual terms. The eligibility for credit hinges on establishing that the sale and property transfer happened at the said place. The Revenue contended that the appellants failed to declare the details of input services for which they were availing credit in the ER-1 return, alleging suppression with the intention to evade duty payment and advocating for the invocation of the extended period of limitation. During the proceedings, the respondent argued that their belief in being entitled to Cenvat Credit was based on a bonafide interpretation of the Circular dated 23/08/2007. This belief, they asserted, precluded the invocation of the extended period of limitation. The Tribunal, after considering the rival submissions, noted that the appellants did not challenge the demand for reversal of Cenvat Credit on merits. The Tribunal found merit in the respondent's argument that their bonafide belief, rooted in the Circular, justified the non-invocation of the extended period of limitation. Additionally, the Tribunal highlighted the absence of specific assertions by the Revenue regarding the declaration of service credit in the ER-1 return, leading to the dismissal of the Revenue's appeal. In conclusion, the Tribunal upheld the respondent's position, emphasizing the significance of the Circular's guidance and the bonafide belief held by the appellants in claiming Cenvat Credit on outward GTA service. The decision rested on the interpretation of relevant legal provisions, Circular directives, and the absence of concrete evidence supporting the Revenue's claims of suppression or non-declaration in the ER-1 return.
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