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2019 (12) TMI 549 - AT - Central ExciseCENVAT Credit - input services - transport of goods by road on outward carriage - Circular No. 1065/4/2018-CX dated 08/06/2018 - HELD THAT - After the decision of the Apex Court in the case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX VERSUS ULTRA TECH CEMENT LTD. 2018 (2) TMI 117 - SUPREME COURT , the CBEC has issued the Circular dated 08/06/2018 wherein the field formation have been given the liberty to examine each and every case on the basis of the law laid down in various cases. Also, after the Circular issued by the Board various Benches of the Tribunal have remanded the case back to the original authority to examine the eligibility of cenvat credit of service tax on transportation of goods up to the customer s premises after the period w.e.f. 01/04/2008. In view of the decision of the Madras High Court in the case of BATA INDIA LIMITED, HOSUR VERSUS THE COMMISSIONER OF CUSTOMS, CENTRAL EXCISE AND SERVICE TAX, CHENNAI-III 2019 (3) TMI 519 - MADRAS HIGH COURT and also in view of the Board Circular No. 1065/4/2018-CX dated 08/06/2018, the matter needs to be remanded to the original authority to verify certain factual aspects such as whether the sale is on FOR basis, whether the freight is integral part of the sale price, whether the duty paid on the value inclusive of freight amount etc. The matter is remanded back to the original authority to pass a fresh order after examining the various documents for the disputed period - appeal allowed by way of remand.
Issues involved:
- Appeal against rejection of cenvat credit on transportation services - Interpretation of 'input service' under Cenvat Credit Rules - Definition of 'place of removal' under Central Excise Act - Applicability of Circular issued by the Board - Remand of the case for further examination Analysis: 1. Cenvat Credit Rejection: The appellant filed three appeals against the rejection of cenvat credit on transportation services by the Commissioner (Appeals). The issue revolved around the disallowance of cenvat credit amounting to Rs. 6,67,747/- due to the payment of service tax on outward carriage. The Assistant Commissioner's Order-in-Original upheld the disallowance along with interest and penalty, leading to the appeals. 2. Interpretation of 'Input Service': The appellant argued that the impugned orders lacked legal sustainability as they failed to properly appreciate the definition of 'input service' as per Rule 2(l) of the Cenvat Credit Rules. They contended that they were entitled to cenvat credit for service tax paid on transportation up to the customer's premises from April 2008 onwards. Reference was made to the definition of 'input service' and 'place of removal' under the Central Excise Act to support the claim. 3. Applicability of Circular: The appellant cited various decisions and Circulars to support their argument that the Circular issued by the Board is binding on the Department. They relied on legal precedents to establish that the Department cannot take a stand contrary to the Circular, emphasizing the importance of adhering to the Circular's directives in such matters. 4. Contrary Viewpoint: The learned AR defended the impugned order, primarily relying on a Supreme Court decision that post-amendment in 2008, the place of removal for cenvat credit purposes would always be the factory gate. Reference was made to subsequent decisions by different Tribunals and High Courts that remanded cases back to the original authority based on the Circular issued by the Board in 2018. 5. Remand for Further Examination: After considering the submissions and legal precedents from both parties, the Tribunal found that a remand was necessary. Citing the Circular and decisions by the Madras High Court and various Tribunals, the Tribunal concluded that the matter needed further verification regarding factual aspects like the nature of sale, inclusion of freight in sale price, and duty payment on freight-inclusive value. Consequently, the appeals were allowed by way of remand, keeping all issues open for the adjudicating authority to re-examine. In conclusion, the Tribunal remanded the case back to the original authority for a fresh examination in light of the legal principles and Circulars cited, emphasizing the need for a detailed review of factual aspects before reaching a final decision.
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