2017 (12) TMI 81 - AT - Central Excise

CENVAT credit - input service - GTA service - reverse charge mechanism - Revenue held a view that they are not eligible for such input service credit as the place of removal should be considered factory gate and any expenses incurred thereafter will not be eligible for credit - Tribunal gave clear remand directions for the Original Authority to examine the applicability of the decision of Hon ble High Court of Chhattisgarh in Ultratech Cement Ltd. 2014 (8) TMI 788 - CHHATTISGARH HIGH COURT to the facts of the present case - Held that - the Original Authority after categorically recording that the point of sale as per the terms of contract (purchase)/PO) between the assessee and the client is the destination/client s premises as the sale is on FOR destination basis , proceed and arrived at a contrary decision. In fact, he attempted to make a distinction between place of delivery and place of sale by relying on the Board Circular dated 20/10/2014 and the provision of Sale of Goods Act, 1930 - the Original Authority mis-directed himself in making such distinction after having recorded the factual position in para 18 of the impugned order dated 28/09/2015. In the face of such factual finding there could be no further interpretation to distinguish the place of delivery from point of sale - credit on GTA service allowed. CENVAT credit - input service - auction service - Held that - the credit is allowed on this service. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Admissibility of Cenvat credit on GTA services, eligibility for credit of auction services, interpretation of 'place of removal' for credit eligibility.

Admissibility of Cenvat credit on GTA services:
The dispute centered around the admissibility of Cenvat credit of service tax paid on GTA services by the appellants. The Revenue argued that expenses incurred beyond the factory gate would not be eligible for credit. The Original Authority initially denied the credit based on the 'place of delivery' and 'point of sale' distinction. However, the Tribunal found that the Original Authority misdirected himself by making such a distinction. The Tribunal referred to various case laws, including M/s Mangalam Cement Ltd. cases, to support the appellant's eligibility for credit. The Tribunal concluded that the place of removal should be equated to the point of sale, which in this case, was the customer's premises upon safe delivery of the goods. The Tribunal set aside the impugned orders denying the credit, as they found no merit in the Revenue's arguments.

Eligibility for credit of auction services:
Another issue was the eligibility of the appellant for a credit of ?5,511 paid towards availing auction services for disposing of scrap in the factory on payment of excise duty. The appellant relied on their own case decided by the Tribunal in 2016 to support their claim for credit. The Tribunal noted that in the appellant's own case, they were allowed to avail the credit for auction services. The appellant did not press the issue of their eligibility for credit on rent-a-cab services, which was denied. The Tribunal found no merit in the Revenue's arguments and set aside the impugned orders, allowing the appeals to that extent.

Conclusion:
The Tribunal, after considering the arguments from both sides and analyzing the facts and legal provisions, found in favor of the appellant on both issues. They set aside the impugned orders denying the credits for Cenvat on GTA services and auction services, allowing the appeals on those grounds. The Tribunal's decision was based on the interpretation of relevant legal provisions and case laws supporting the appellant's eligibility for the credits.