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2019 (10) TMI 812 - AT - Central ExciseCENVAT Credit - input service - GTA Services - place of removal - job-work - Rule 2(l) of Cenvat Credit Rules, 2004 - appellant being manufacturer of Biscuit on job work basis on behalf of M/s Parle Products Pvt. Ltd - the goods are cleared to the depot of principle and excise duty is paid on MRP based valuation in terms of Section 4A of Central Excise Act, 1944 - Difference of opinion. HELD THAT - In view of various contrary judgments not only in the Division Bench of this Tribunal but also by Hon ble High Courts of Rajasthan and Allahabad, there is no consistency on the legal position for availment of cenvat credit on outward GTA in case of goods manufactured and cleared to principles at their depot particularly in the set of facts of present case - Therefore, to arrive at consistent view, the matter needs to be considered by Larger Bench of This Tribunal. The issue needed to be decided is Whether in facts and circumstances the appellant is entitled for the cenvat credit on outward GTA service which is used for transportation of goods from job worker premise to the depot of principle when the valuation was adopted under Section 4A by applying the Notification No. 36/2001-CE (NT)? The Registry is directed to place this matter before Hon ble President of this Tribunal for constituting a Larger Bench.
Issues:
Entitlement to cenvat credit on outward GTA service for transportation of goods from job worker premise to principle's depot when valuation is under Section 4A. Analysis: Issue 1: Entitlement to Cenvat Credit on Outward GTA Service The case revolved around whether the appellant, manufacturing 'Biscuits' on job work basis for a principle company, is entitled to cenvat credit on outward GTA service for transporting goods to the principle's depot where excise duty is paid on MRP valuation under Section 4A of the Central Excise Act, 1944. The appellant argued that they should receive the credit as the depot of the principle is the place of removal, entitling them to cenvat credit as per Rule 2(l) of the Cenvat Credit Rules, 2004. This argument was supported by various decisions, including the Rajasthan High Court judgment and previous Tribunal rulings. On the other hand, the Revenue contended that cenvat credit should be denied based on judgments like Kohinoor Biscuit Products. The appellant further highlighted the applicability of the amended Rule 2 of Cenvat Credit Rules, 2004, defining the place of removal, making previous judgments inapplicable to the current case period from November 2015 to June 2017. Issue 2: Judicial Precedents The Tribunal referred to conflicting judgments on similar issues. While the Division Bench of the Tribunal and the Rajasthan High Court favored allowing cenvat credit in such cases, the Allahabad High Court upheld the denial of credit based on the place of removal being the factory gate, not the principle's depot. The Tribunal's decisions were based on the interpretation of Section 4A and Section 4(3)(c) of the Central Excise Act, along with Rule 3 of Cenvat Credit Rules, 2004. The differing interpretations led to the proposal of the matter to be considered by a Larger Bench for a consistent view. The Tribunal highlighted the need for clarity on whether cenvat credit is permissible for outward GTA services in scenarios where goods are manufactured on job work basis and cleared to the principle's depot, especially when valuation is under Section 4A. Conclusion The Tribunal, after considering the arguments and conflicting precedents, proposed to refer the matter to a Larger Bench for a consistent view on the entitlement to cenvat credit on outward GTA services used for transporting goods from a job worker's premise to the principle's depot when valuation is under Section 4A. The decision aimed to address the lack of consistency in legal positions across various judgments and courts, emphasizing the need for clarity on the issue.
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