2017 (9) TMI 1371 - AT - Central Excise

CENVAT credit - GTA services used for supplying goods to their own depots - place of removal - Credit is sought to be denied on the presumption that the factory gate is place of removal and not the depot - Held that - Hon ble High Court of Chhattisgarh in the case of Ultra Tech Cement Ltd. 2014 (8) TMI 788 - CHHATTISGARH HIGH COURT has observed that no such presumption can be made and the place of removal has to be decided on the basis of facts of each case. The Tribunal in M.P. Biscuits Pvt. Ltd. 2012 (10) TMI 623 - CESTAT, New Delhi has in similar circumstances held that credit of input service of GTA can be allowed for removal up to the depot of the principal manufacturer in respect of M.P. Biscuits Pvt. Ltd. which are also assessed on the basis of MRP under Section 4A. At the time of clearance from the factory, the documents clearly indicate that the goods are intended for supply to their own depot and there is no sale involved. Taking all these facts into account, the place of removal in these circumstances will be depot and the credit of GTA service upto the depot of the appellant would be available irrespective of the fact that the said goods are trans-shipped at Bhiwandi or otherwise. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
- Denial of cenvat credit on GTA services used for supplying goods to own depots.

Analysis:

Issue 1: Denial of cenvat credit on GTA services

The appellant, Hawkins Cookers Ltd., appealed against the denial of cenvat credit on GTA services used for supplying goods to their own depots. The appellant's counsel argued that since the goods are sold for the first time at their depot, the depot should be considered the place of removal, not the factory gate. They relied on a decision by the Hon'ble High Court of Chhattisgarh which emphasized that the place of removal should be determined based on the facts of each case, rejecting the presumption that the factory gate is the place of removal. The counsel also highlighted that the invoices issued by the appellant for clearance of goods were addressed to their own depots, indicating that the sale did not take place at the factory gate. The Tribunal in a similar case had allowed the credit of input service of GTA for removal up to the depot of the principal manufacturer, emphasizing that outward transportation up to the place of removal falls within the definition of input service. The documents at the time of clearance from the factory indicated that the goods were intended for supply to their own depot, confirming that no sale occurred at the factory gate. Therefore, the Tribunal concluded that the place of removal in this case would be the depot, and the credit of GTA service up to the depot would be available, regardless of trans-shipment at Bhiwandi or elsewhere.

Conclusion:

The Tribunal allowed the appeal, emphasizing that the place of removal should be determined based on the specific circumstances of each case, rejecting the presumption that the factory gate is always the place of removal. The decision highlighted the importance of analyzing the facts and documentation to ascertain the actual place of removal for claiming cenvat credit on GTA services used for supplying goods to own depots.