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2019 (12) TMI 110 - AT - Central ExciseCENVAT credit - Goods Transport Agency (GTA) in relation to transportation of goods from the factory and depots to the buyer s premises - credit denied on the ground that the documents furnished by the appellant pertain to clearances of final products from the factory to the buyer s premises - HELD THAT - Undisputedly cement has been sold in this case on FOR destination basis for delivery at the buyer s premises by the supplier. Cenvat Credit Rules permit availment of Cenvat credit on GTA services up to the place of removal. The question is whether in such a case whether Cenvat credit on outward transportation to the buyer s premises is admissible. Identical issue was dealt with by the Hon ble Apex Court in the case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX VERSUS ULTRA TECH CEMENT LTD. 2018 (2) TMI 117 - SUPREME COURT where it was held that Cenvat Credit on goods transport agency service availed for transport of goods from place of removal to buyer s premises was not admissible to the respondent. The learned adjudicating authority must be given an opportunity to examine the present case in the light of this judgment and also all the documents relied upon by the appellant to assert that they are entitled to Cenvat credit which has been denied to them as the purchase orders clearly indicate that sale was on FOR buyer s premises basis and decide the entitlement of Cenvat credit - thus without passing any remarks on the merits of the case the impugned order is set aside and the matter is remanded to the adjudicating authority to pass a fresh order after considering this judgment and following principles of natural justice. Appeal allowed by way of remand.
Issues Involved:
1. Entitlement to Cenvat credit on Goods Transport Agency (GTA) services for transportation from the factory and depots to the buyer’s premises. 2. Applicability of the Supreme Court judgment in the case of Ultratech Cement Ltd on the current case. 3. Examination of documents to establish entitlement to Cenvat credit based on FOR (Free on Road) buyer’s premises basis. Detailed Analysis: 1. Entitlement to Cenvat Credit on GTA Services: The appellant, a cement manufacturer, took Cenvat credit on GTA services for transporting goods from the factory and depots to the buyer’s premises on an FOR destination basis. A show cause notice was issued to deny and recover the Cenvat credit and impose penalties. The original authority allowed the Cenvat credit except for ?3,44,228/- and its interest, citing that the documents pertained to clearances from the factory to the buyer’s premises. The appellant contended that the purchase orders indicated sales on an FOR buyer’s premises basis, thus entitling them to Cenvat credit. 2. Applicability of Supreme Court Judgment in Ultratech Cement Ltd Case: The departmental representative argued that the adjudicating authority relied on a Tribunal order favoring the appellant, but this was not aligned with the Supreme Court's judgment in Ultratech Cement Ltd [2018 (9) GSTL 337 (SC)], which held that Cenvat credit beyond the factory or depot to the buyer’s premises is not permissible, even for FOR destination sales. The Supreme Court emphasized that the definition of 'input service' under Rule 2(l) of the Cenvat Credit Rules, 2004, only allows credit up to the place of removal, not beyond. 3. Examination of Documents for FOR Buyer’s Premises Basis: The adjudicating authority must re-examine the documents provided by the appellant to verify if they indeed support the claim that the sales were on an FOR buyer’s premises basis. The Supreme Court's judgment in Ultratech Cement Ltd necessitates that such claims be scrutinized to ensure compliance with the amended definition of 'input service,' which restricts Cenvat credit to services used up to the place of removal. Conclusion: The Tribunal found that the adjudicating authority should re-examine the case in light of the Supreme Court's judgment and the documents submitted by the appellant. The impugned order was set aside, and the matter was remanded to the adjudicating authority for a fresh decision, ensuring adherence to the principles of natural justice and the binding nature of the Supreme Court's ruling under Article 141 of the Constitution. Order: The appeal is allowed by way of remand, and the adjudicating authority is directed to pass a fresh order after considering the Supreme Court's judgment and the appellant’s documents. (Pronounced in the open court on 14.11.2019)
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