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2018 (10) TMI 829 - HC - Central ExciseCENVAT credit - input services or not - Goods Transport Agency Services in respect of which the assessee had availed the Cenvat credit of service tax during the period from July, 2014 to March, 2015 for outward transportation of cement - place of removal - Held that - In view of the amended definition of input service w.e.f. 01.03.2008 as also in the light of judgment of the Supreme Court in Ultra Tech Cement Ltd. 2018 (2) TMI 117 - SUPREME COURT OF INDIA , judgment of the Tribunal cannot be sustained in law and the demand is liable to be revived - It was held by the Supreme Court 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 matter is remanded back to the Tribunal for consideration of the question of penalty to decide the same after hearing both the parties in accordance with law - appeal allowed by way of remand.
Issues:
1. Eligibility of Goods Transport Agency Services as 'input services' for CENVAT Credit. 2. Interpretation of the definition of 'place of removal' under CENVAT Credit Rules, 2004. 3. Consideration of penalty in case of revival of demand. Issue 1: Eligibility of Goods Transport Agency Services as 'input services' for CENVAT Credit: The appellant-Revenue challenged the Tribunal's judgment allowing the appeal of the respondent-assessee, who availed CENVAT Credit of service tax paid for Goods Transport Agency Services (GTA Services) for outward transportation of cement. The appellant argued that the GTA Services were not covered under the definition of 'input service' under Rule 2(l) of the CENVAT Credit Rules, 2004. The Tribunal failed to consider the amendment in the definition of 'input service' post 01.03.2008, substituting "clearance of final products from the place of removal" with "clearance of final products up to the place of removal." The appellant contended that the services taken up to the place of removal should be covered under 'input service.' Issue 2: Interpretation of the definition of 'place of removal' under CENVAT Credit Rules, 2004: The appellant argued that the Tribunal overlooked the change in the definition of 'input service' post 01.03.2008, leading to ambiguity regarding GTA Services up to the place of removal. Reference was made to the definition of 'place of removal' in Section 4(3)(c) of the Central Excise Act, 1944. The appellant contended that the Tribunal erred in allowing the appeal without considering the amendment and Supreme Court's judgment in a related case. The Tribunal's decision was deemed unjustified, and the demand order was sought to be revived along with imposition of penalty on the assessee. Issue 3: Consideration of penalty in case of revival of demand: The respondent-assessee argued that a similar question for previous assessment years had been decided in their favor by the Court, with the Revenue's Special Leave Petition (SLP) pending against it. The respondent requested deferral of the hearing pending the Supreme Court's final decision, highlighting important aspects allegedly overlooked by the Supreme Court in a related case. The respondent contended that penalty should not be imposed as the Tribunal's decision was consistent with the prevailing law during that time, and the demand was satisfied based on that understanding. The appellant, however, asserted that penalty should be imposed if the judgment is set aside and demand revived, as the issue was covered by the Supreme Court's judgment. In the final judgment, the High Court found that the Tribunal's decision could not be sustained in law due to the amended definition of 'input service' and the Supreme Court's judgment in a related case. The demand was ordered to be revived, but the matter was remanded to the Tribunal for consideration of the penalty issue. The High Court allowed the appeal, setting aside the Tribunal's judgment, confirming the disallowance of CENVAT Credit, and interest, while leaving the question of penalty to be decided by the Tribunal after hearing both parties.
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