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2020 (2) TMI 903 - AT - Central ExciseCENVAT Credit - input services - GTA service - entitlement of credit even after 1.4.2008 on FOR sales i.e. delivery upto the factory gate of the customers - place of removal - period from October, 2007 to October, 2010 - CBEC Circular No.97/8/2007-ST, dated 23.8.2007 - HELD THAT - Prior to the amendment of 2008, in the definition of input service as per Rule 2(l) ibid, the words used were outward transportation from the place of removal but vide notification No.10/2008-CE (NT), dated 1.3.2008 the aforesaid definition of input service was amended by substituting the same with the words, outward transportation upto the place of removal . Although the pre-amended definition of input service as contained in Rule 2(l) ibid uses the expression from the place of removal, however, after the amended w.e.f. 1.3.2008 the word from is replaced by the word upto and from the amended definition it the clear that only upto the place of removal the service is treated as input service and not beyond that - The benefit which was admissible even beyond the place of removal now gets terminated at the place of removal itself. Extended period if limitation - HELD THAT - The issue was interpretation of statutory provision regarding availment of input service tax credit for GTA services on outward supply in cases of FOR supplies and such issues of interpretation cannot be a ground for invoking extended period - in the light of the fact that the appellant is a Government of India Enterprise, there is no suppression of facts nor any willful default with intention to evade duty or to avail excess Cenvat credit. Accordingly, the extended period was not invocable and the demand for the period, which as per learned counsel is from April, 2008 to May, 2010, is barred by limitation - So far as the period June, 2010 to October, 2010 is concerned, the same being within normal period, the Appellants are liable for the same and for the demand for this period, the show cause notice is upheld. Penalty - HELD THAT - The appellants did not have any malafide intention, therefore they are not liable for any penalty also. For the purpose of re-calculating the demand for the normal period, the matter is remanded to the Adjudicating Authority - appeal allowed by way of remand.
Issues involved:
1. Entitlement of GTA service as an input service under Rule 2(l) of Cenvat Credit Rules, 2004 post 1.4.2008 for FOR sales beyond the place of removal. Analysis: 1. The appellant, a government-owned corporation, availed Cenvat Credit on GTA Services for depot transfers and FOR sales from October 2007 to October 2010. A show cause notice proposed denial of Cenvat Credit amounting to Rs. 82,52,201/-, later reduced to Rs. 2,61,459/- for the period April 2008 to October 2010. The Commissioner relied on the Supreme Court's decision in C.C.E. & S.T. vs. Ultratech Cement Ltd. to deny the credit beyond the place of removal post the 2008 amendment to Rule 2(l) of Cenvat Credit Rules, 2004. 2. The appellant argued that the Cenvat credit for GTA service should be eligible as it is incurred up to the customer's premises, which is considered the place of removal in their case. They cited decisions supporting their claim, including a Co-ordinate Bench's ruling and High Court judgments. The appellant contended that the extended period of limitation was wrongly invoked, as there was no suppression of facts or willful default. They referred to a CBEC circular stating that the extended period should not be invoked in cases of interpretation of law before the Supreme Court's decision. 3. The Tribunal noted the 2008 amendment to Rule 2(l), replacing "from the place of removal" with "upto the place of removal," restricting the definition of input service. The Tribunal agreed with the Supreme Court's decision in Ultratech Cement, emphasizing that Cenvat credit for GTA services beyond the place of removal is not admissible post-amendment. The Tribunal rejected the appellant's arguments based on previous circulars and judgments, citing a Co-ordinate Bench's recent decision on a similar issue. 4. Regarding the extended period of limitation, the Tribunal acknowledged the divergent views before the Supreme Court's decision on GTA service under Rule 2(l) post-amendment in 2008. The Tribunal held that issues of interpretation of statutory provisions cannot be a basis for invoking the extended period. As the appellant was a Government of India Enterprise with no malafide intention to evade duty, the extended period was deemed inapplicable for the period before May 2010. However, for the period June 2010 to October 2010, within the normal period, the demand was upheld, and no penalty was imposed due to the absence of malafide intention. 5. The Tribunal disposed of the appeal, remanding the matter to the Adjudicating Authority for recalculating the demand for the normal period. The Tribunal pronounced the order on 19.02.2020.
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