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2019 (6) TMI 378 - AT - Central ExciseCENVAT Credit - input services - Goods Transport Agency service used for outward transportation of goods - place of removal - sale of Cement on FOR basis - HELD THAT - Hon ble Apex Court in the case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX VERSUS ULTRA TECH CEMENT LTD. 2018 (2) TMI 117 - SUPREME COURT 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 to the respondent. The facts of the case in the present set of appeals being identical to the case of Ultratech Cement inasmuch as the credit being claimed is on the Goods Transport Agency services availed to transport cement from the factory gate to the buyer s premises on the ground that the sale being on FOR basis, the place of removal shifts to the buyer s premises and therefore Cenvat Credit is admissible, I am legally bound to follow the ratio of the judgment of the Hon ble Apex Court which held against the assessee that no Cenvat Credit is admissible. Credit cannot be allowed - appeal dismissed - decided against appellant.
Issues:
Entitlement to Cenvat Credit on Goods Transport Agency services post-amendment to Rule 2(l) of CCR, 2004 w.e.f. 01.03.2008; Interpretation of "place of removal" in the context of Cenvat Credit availed for outward transportation of goods; Application of judgments by Hon'ble Apex Court in similar cases. Analysis: Issue 1: Entitlement to Cenvat Credit on Goods Transport Agency services post-amendment to Rule 2(l) of CCR, 2004 w.e.f. 01.03.2008: The appellant, a cement manufacturer, claimed Cenvat Credit for outward transportation of goods post-amendment to Rule 2(l) of CCR, 2004. The amendment restricted credit to transportation up to the "place of removal." The appellant contended that their sales were on a FOR basis, making the buyer's premises the place of removal. Despite arguments, the lower authorities denied the credit. The appellant appealed, challenging the denial based on the judgment in Ultratech Cement. The Tribunal analyzed Ultratech Cement's case, where the Hon'ble Apex Court disallowed Cenvat Credit for transport to the buyer's premises. The Tribunal, bound by this precedent, rejected the appellant's claim, emphasizing the identical nature of the cases and the reaffirmation of the decision in a subsequent review petition. Issue 2: Interpretation of "place of removal" in the context of Cenvat Credit availed for outward transportation of goods: The key contention revolved around the interpretation of "place of removal" post-amendment. The appellant argued that for sales on a FOR basis, the buyer's premises should be considered the place of removal. They cited the Sale of Goods Act and the case of Roofit Industries to support their position. However, the Tribunal, guided by Ultratech Cement's judgment, emphasized that the place of removal, as per the amended Rule, did not extend to the buyer's premises for availing Cenvat Credit on transport services beyond the factory gate. The Tribunal highlighted the importance of precedent and the specific language of the law in determining the scope of Cenvat Credit entitlement. Issue 3: Application of judgments by Hon'ble Apex Court in similar cases: The appellant argued that Ultratech Cement did not consider the FOR basis of sales, seeking a different interpretation. However, the Tribunal noted that Ultratech Cement's judgment explicitly addressed the issue of sale at the buyer's doorstep and transport risk, leading to the denial of Cenvat Credit. Despite the appellant's contentions and reliance on Tribunal orders, the Tribunal reiterated its obligation to follow the Hon'ble Apex Court's decision, which was upheld even in a review petition. The Tribunal emphasized the binding nature of the Apex Court's rulings, especially when dealing with identical factual scenarios. In conclusion, the Tribunal rejected the appeal, aligning with Ultratech Cement's precedent and reaffirming the denial of Cenvat Credit for transport services beyond the factory gate to the buyer's premises post-amendment to Rule 2(l) of CCR, 2004. The judgment underscores the significance of legal precedents and the authoritative nature of the Hon'ble Apex Court's decisions in interpreting and applying tax laws.
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