2019 (3) TMI 950 - AT - Central Excise

CENVAT Credit - input services - GTA service - place of removal - Held that - The Hon ble Supreme Court in the case of Ultra Tech Cement Ltd. 2019 (2) TMI 1487 - CESTAT AHMEDABAD has held that credit is eligible from the place of removal upto the buyer s premises. However, in the case of Roofit Industries Ltd. 2015 (4) TMI 857 - SUPREME COURT , the Hon ble Apex Court has held that when the sale is on FOR basis, all the charges / cost have to be included in the assessable value for the payment of central excise duty. Thus, in such cases, when the sale takes at buyer s premises, the place of removal is the buyer s premises - Therefore, it is necessary to determine the place of removal to consider the eligibility of credit of service tax paid on freight charges upto the buyer s premises. For this purpose, I deem it fit to remand the matter to the adjudicating authority who shall look into the issue of eligibility of credit on GTA service after determining the place of removal - matter on remand. CENVAT Credit - works contract service - Held that - The mere allegation in the Show Cause Notice is that the input service is not eligible for credit. The period involved is prior to 1.4.2011. The invoice produced by the ld. Counsel also shows that the period is prior to 1.4.2011. The input services for setting up of factory / premises is eligible during the period prior to 14..2011 - credit allowed. Appeal allowed in part and part matter on remand.

Summary

Issues Involved: Disallowance of credit on GTA service, Disallowance of credit on works contract service, Disallowance of credit on printing charges, Penalty imposition

Disallowance of Credit on GTA Service:
The appellant, engaged in the manufacture of rupture disk, availed wrong credit on certain input services, including GTA Service for transportation of goods up to the buyer's premises. The Commissioner (Appeals) disallowed this credit, prompting the appellant to appeal before the Tribunal. The appellant argued that the place of removal being the buyer's premises, they are eligible for the credit as per a circular issued by the Board. The Tribunal noted conflicting judgments but decided to remand the matter to the adjudicating authority to determine the place of removal and consider the eligibility of credit on GTA service based on the circular and previous tribunal decisions.

Disallowance of Credit on Works Contract Service:
The second issue pertained to the disallowance of credit on works contract service availed by the appellant. The department alleged that this service was not an eligible input service, citing the period involved as prior to 1.4.2011. The appellant contended that the works contract service was eligible for credit during the period in question, as evidenced by the invoice date. The Tribunal agreed with the appellant, setting aside the disallowance of credit on works contract service.

Disallowance of Credit on Printing Charges:
Regarding the disallowance of credit on printing charges, the appellant chose not to press this issue. Consequently, the Tribunal upheld the disallowance of credit on printing charges as the appellant did not contest this decision.

Penalty Imposition:
The penalty imposed in relation to the disallowance of credit on printing charges was set aside by the Tribunal. The Tribunal disposed of the appeals by remanding the GTA service issue, allowing the works contract service credit, upholding the disallowance of credit on printing charges, and setting aside the penalty imposed.