2018 (11) TMI 460 - AT - Central Excise

CENVAT Credit - input services - outward transportation of goods upto the buyer s premises - Held that - The issue has attained finality as per the decision of the Hon ble Supreme Court in the case of Ultratech Cement Ltd. 2018 (2) TMI 117 - SUPREME COURT OF INDIA , where it was held that Cenvat Credit on goods transport agency service availed for transport of goods from place of removal to buyer s premises was not admissible - credit not allowed. Penalty - Held that - There were several litigations pending before various High Courts and that the matter had reached the Hon ble Supreme Court and being an interpretational, the penalty is unjustified. Appeal allowed in part.

Summary

Issues:
1. Eligibility for credit on outward transportation of goods up to the buyer's premises.
2. Penalty imposition in case of interpretational issues reaching the Hon'ble Supreme Court.

Analysis:

Issue 1: Eligibility for credit on outward transportation of goods up to the buyer's premises
The case involved the appellants availing CENVAT credit on outward transportation of goods to the buyer's premises. The appellant argued that the input service extended beyond the factory gate to the buyer's premises as per purchase orders and transaction terms. The appellant relied on circulars by the Board to support their claim. However, the respondent supported the findings of the lower authorities, citing a recent Supreme Court decision in Ultratech Cement Ltd. The Tribunal noted that the issue had attained finality based on the Supreme Court's decision, which held that credit on outward transportation of goods to the buyer's premises is not admissible post a certain date. Consequently, the Tribunal held that the appellant was not eligible for the credit.

Issue 2: Penalty imposition in case of interpretational issues reaching the Hon'ble Supreme Court
The appellant also contested the penalty imposed, arguing that the issue was interpretational and had been taken to the Supreme Court, making the penalty unwarranted. The Tribunal acknowledged the interpretational nature of the issue and the ongoing litigations in various courts. Considering these factors, the Tribunal deemed the penalty unjustified and modified the impugned order by setting aside the penalty while maintaining the demand and interest. The appeal was partly allowed with the relief of penalty removal.

In conclusion, the Tribunal ruled that the appellants were not eligible for credit on outward transportation of goods to the buyer's premises based on the Supreme Court's decision. Additionally, the Tribunal found the penalty imposition unjustified in the context of interpretational issues reaching the Supreme Court, leading to the partial allowance of the appeal with the penalty removal.