2019 (4) TMI 646 - AT - Central Excise

CENVAT Credit - input services - Outward Courier services - period involved is from March 2007 to February 2010 - Held that - The said amount involves both inward transportation of raw materials as well as goods sent for job works. The definition does not put any restriction with regard to inward transportation of raw materials and so also in the case of goods sent for job work. The credit availed on the service tax paid for such charges would thus be eligible. However, the amount has to be quantified. The Hon ble Apex Court in the case of M/s. Ultratech Cement Ltd. 2018 (2) TMI 117 - SUPREME COURT OF INDIA has held that after the amendment, the credit availed on outward transportation beyond the place of removal would not be eligible with effect from 01.04.2008. The appellant has pointed out that the period involved is from March 2007 to February 2010. The credit availed up to 01.04.2008 would therefore be eligible to the appellant. Thus, the eligibility of credit in respect of courier services needs re-consideration both with regard to quantification as well as eligibility for the period after 01.04.2008. Appeal allowed by way of remand.

Summary

Issues:
1. Eligibility of CENVAT credit on outward courier, CHA, and C&F Agent Services.

Analysis:

Issue 1: Eligibility of CENVAT credit on outward courier services

The case involved the eligibility of CENVAT credit on outward courier services utilized by the appellant for dispatching finished goods and samples to customer premises. The Department contended that such credit was not eligible post an Apex Court ruling. The Department relied on the case of Commissioner of Central Excise & Service Tax Vs. M/s. Ultratech Cement Ltd. to support their argument that credit on outward transportation beyond the place of removal was not permissible from 01.04.2008. The respondent, however, argued that the courier services were used for inward transportation of raw materials and for sending goods for job works, emphasizing that there was no restriction on such credit. They referred to a Tribunal decision and a Board Circular to support their stance. The Tribunal noted that the credit availed on service tax for inward transportation and goods sent for job works was indeed eligible, but the amount needed quantification. The Tribunal also highlighted the need to determine the place of removal to ascertain credit eligibility.

The Tribunal, considering the arguments and legal precedents cited by both parties, observed that the credit availed on inward transportation of raw materials and goods sent for job works was permissible. However, it stressed the importance of quantifying the amount in question. The Tribunal referenced the Apex Court ruling and a Tribunal decision that emphasized the significance of determining the place of removal for credit eligibility. Consequently, the Tribunal remanded the issue to the adjudicating authority for reevaluation in line with the directions provided, allowing the appeal by way of remand. The appellant's counsel highlighted the period involved and emphasized the eligibility of credit up to a certain date, necessitating a reevaluation of the eligibility of credit for courier services post that date.

In conclusion, the Tribunal remanded the issue of the eligibility of CENVAT credit on outward courier services to the adjudicating authority for a fresh assessment based on the provided directions, ultimately allowing the appeal by way of remand.