2021 (12) TMI 176 - AT - Central Excise

CENVAT credit - input service - GTA service - disallowed on the ground that the appellant have availed the CENVAT credit in respect of outward transportation of the goods cleared from the factory to depot and from the factory/depot to customer - HELD THAT - If the GTA service in respect of receipt of inputs that will amount to inward transportation and credit is undisputably available in terms of definition of input service under Rule 2(l) of CENVAT Credit Rules, 2004. In the case of outward transportation for clearance of finished goods from factory to depot, depot being the place of removal , CENVAT credit on GTA service from factory gate to place of removal is clearly admissible. However, there is a dispute on the facts which is the root of the case. Therefore, at this stage, the Tribunal cannot take a conclusive view in absence of clarity on facts. The matter needs to be reconsidered on the facts of the case that whether the GTA service on which credit was taken is for outward transportation from factory gate to the customer or it is in respect of inward transportation from vendors/suppliers of inputs place to the appellant s factory. Appeal is allowed by way of remand to the adjudicating authority.

Summary

Issues:
Disallowed CENVAT credit on GTA service for outward transportation beyond factory gate.

Analysis:
The appeal challenged the disallowance of CENVAT credit on GTA service beyond the factory gate. The Revenue contended that GTA service beyond the factory gate is not admissible for credit as per Rule 2(l) of CENVAT Credit Rules, 2004, considering the factory gate as the 'place of removal'.

Despite the appellant's absence, the Tribunal proceeded with the case. After hearing the Assistant Commissioner and reviewing submissions, it was noted that the appellant claimed GTA service credit for inward transportation of inputs to the factory and clearance of finished goods to the depot. However, the show cause notice and adjudication order assumed the credit was for outward transportation to customers, leading to a factual contradiction.

The Tribunal acknowledged that credit for inward transportation of inputs is permissible under the definition of 'input service'. For outward transportation to the depot (as the 'place of removal'), CENVAT credit on GTA service from the factory gate is acceptable. However, due to factual discrepancies, a conclusive decision couldn't be made. The case required a reassessment to determine if the credit was for outward transportation to customers or inward transportation from vendors to the factory.

Consequently, the impugned order was set aside, and the matter was remanded for a fresh decision by the adjudicating authority. The appellant was granted a fair opportunity for a personal hearing and submissions during the reconsideration. A time limit of 3 months was set for the denovo adjudication due to the case's age, ultimately allowing the appeal by remanding it to the adjudicating authority.