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2024 (11) TMI 1178 - AT - Central ExciseCENVAT Credit - outward GTA service used in connection with clearance of excisable goods namely cement from the factory premise to buyer premise - inclusion of cost of transportation in the assessable value - HELD THAT - The fact is not under dispute that the appellant have undertaken to deliver the goods at the customer s premises. The freight charges of GTA on which Cenvat credit was taken is included in the assessable value of the excisable goods. This is evident from the excise invoice raised by the appellant. From the perusal of the above invoice, it is observed that the freight charges was not separately collected by the appellant, therefore, the same is deemed to be included in the assessable value on which the excise duty was paid. In this identical fact the issue in hand is covered by this Tribunal s judgment in the case of Ultratech Cement Ltd. 2019 (2) TMI 1487 - CESTAT AHMEDABAD which was upheld by the Hon ble Gujarat High Court reported at the Commissioner, Central Goods and Service Tax versus M/s. Ultratech Cement Ltd. 2020 (3) TMI 1206 - GUJARAT HIGH COURT . The issue involved in the present case is no longer res-integra and accordingly the appellant are entitled for Cenvat credit on outward GTA in the facts of the present case. Hence, the impugned orders are set aside - Appeal allowed.
Issues Involved:
1. Entitlement of the appellant to Cenvat credit on outward Goods Transport Agency (GTA) service used for the transportation of excisable goods. 2. Interpretation of "place of removal" and its impact on Cenvat credit eligibility. 3. Application of beneficial circulars and their retrospective withdrawal. 4. Limitation and the issue of time-barred demands. Detailed Analysis: 1. Entitlement to Cenvat Credit on Outward GTA Service: The primary issue was whether the appellant was entitled to Cenvat credit on outward GTA services used for transporting excisable goods, specifically cement, from their factory to the buyer's premises. The appellant argued that since the freight charges were included in the assessable value of the goods on which central excise duty was paid, they were eligible for the credit. The tribunal referred to previous judgments, including the Ultratech Cement Ltd case, where it was held that if the transportation cost is included in the assessable value, the credit on outward transportation is permissible. The tribunal found that the appellant's situation aligned with these precedents, thus entitling them to Cenvat credit. 2. Interpretation of "Place of Removal": The tribunal examined the concept of "place of removal" as defined under Section 4(3)(c) of the Central Excise Act, 1944, which includes the factory, warehouse, or any other place where goods are stored without duty payment. The tribunal noted that the sale was completed at the customer's doorstep, making it the "place of removal." This interpretation was consistent with the Supreme Court's rulings in cases like CCE vs. Ispat Industries Ltd, which emphasized determining the "place of removal" concerning the manufacturer's premises. The tribunal concluded that since the appellant bore the transportation risk until delivery, the outward freight qualified as "input service." 3. Application of Beneficial Circulars: The appellant contended that they operated under the guidelines of Circulars dated 22.12.2014 and 23.08.2007, which were in effect during the relevant period. Although these circulars were withdrawn on 08.06.2018, the tribunal agreed that beneficial circulars could not be withdrawn retrospectively, as established by the Supreme Court. Therefore, the appellant was entitled to the benefits provided by these circulars during the material period. 4. Limitation and Time-Barred Demands: The tribunal addressed the issue of limitation, noting that the matter of outward GTA credit had been contentious and subject to extensive litigation. Given the ongoing legal uncertainty and the absence of any malafide intention by the appellant, the tribunal found that demands for the extended period were unsustainable due to the time-bar. Consequently, any demand for Cenvat credit reversal beyond the standard limitation period was not valid. Conclusion: The tribunal concluded that the appellant was eligible for Cenvat credit on the outward GTA services. The impugned orders were set aside, and the appeals were allowed with consequential reliefs. The judgment reinforced the principle that transportation costs included in the assessable value justified the credit, and beneficial circulars could not be withdrawn retrospectively. Additionally, the tribunal emphasized that demands beyond the standard limitation period were time-barred, considering the legal ambiguities surrounding the issue.
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