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2019 (9) TMI 109 - AT - Central ExciseCENVAT Credit - input services - goods transport agency service utilized by them for outward transportation - period prior to 1st April 2008 - credit denied on the ground that freight had been shown separately without inclusion in the assessable value for such goods that were cleared to the domestic market and that, in relation to exports, the port could not be accepted as place of removal. HELD THAT - The issue can be settled without venturing into those. The case made out by the Learned Authorised Representative does not find favour as the assessment of the final product does not in any way impinge upon claim for credit under CENVAT Credit Rules, 2004. Learned Authorised Representative was unable to bring any provision that does so to our notice. The decision of the Hon ble Supreme Court in COMMISSIONER OF CENTRAL EXCISE SERVICE TAX VERSUS ULTRA TECH CEMENT LTD. 2018 (2) TMI 117 - SUPREME COURT has also equally made clear that the law as settled by decision of the Larger Bench would hold for the period prior to 1st April 2008. Appeal allowed - decided in favor of appellant.
Issues:
- Denial of CENVAT credit on tax paid for 'goods transport agency service' for outward transportation prior to 1st April 2008. - Inclusion of freight charges in the assessable value for goods. - Interpretation of 'place of removal' in relation to exports. - Admissibility of CENVAT credit for outward transportation costs. - Precedence of Tribunal decisions on CENVAT credit eligibility. Analysis: 1. Denial of CENVAT Credit: The appeal challenged the denial of CENVAT credit on tax paid for utilizing 'goods transport agency service' for outward transportation before 1st April 2008. The original authority rejected the credit entitlement, ordering recovery of the amount on the grounds of separate freight charges not included in the assessable value for domestic market goods and the 'place of removal' issue for exports. 2. Inclusion of Freight Charges: The appellant argued that the original authority exceeded the adjudication scope outlined in the show cause notice, focusing on 'place of removal'. The contention was that freight charges were indeed included in the assessable value, contrary to the authority's conclusion. Reference was made to the Tribunal's decision in ABB Ltd, highlighting discrepancies with the decisions relied upon by the authority. 3. Interpretation of 'Place of Removal': The Authorized Representative emphasized the necessity of including inward costs in final product assessable value for CENVAT credit eligibility. Citing findings from the Commissioner's report and the Tribunal's decision in India Japan Lighting Pvt Ltd, the Representative argued that outward transportation post-clearance does not constitute an input service for final product clearance. 4. Admissibility of CENVAT Credit: The Tribunal found that the final product assessment did not impact CENVAT credit claims under the CENVAT Credit Rules, 2004. The decision in Indian Japan Lighting Pvt Ltd was deemed irrelevant post the Larger Bench's ruling in ABB Ltd, clarifying that outward transportation cost inclusion in transaction value is not a prerequisite for CENVAT credit eligibility. 5. Precedence of Tribunal Decisions: Citing the Supreme Court's decision in Commissioner of Central Excise and ST v. Ultra Tech Cement Ltd, it was affirmed that the Larger Bench's ruling applies to the period preceding 1st April 2008. Consequently, the impugned order was set aside, and the appeal was allowed based on established legal precedents. In conclusion, the judgment addressed the denial of CENVAT credit, inclusion of freight charges, 'place of removal' interpretation, admissibility of CENVAT credit for outward transportation costs, and the precedence of Tribunal decisions, ultimately allowing the appeal based on established legal principles and precedents.
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