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2021 (3) TMI 1115 - AT - Central ExciseCENVAT Credit - input services - Outward Transportation Service for clearance of Excisable Goods by the appellant - HELD THAT - From the invoice it can be seen that freight amount of ₹ 45,000 was charged by the appellant to their customers separately, the said amount of the freight was also not included in the assessable value - This fact is further fortified from the bifurcation of the Sale value given in the contract of TAMIL NADU LIVESTOCK DEVELOPMENT AGENCY - From the contract also it is clear that the freight is not included in the assessable value however, the same was separately charged to the customers. This is a very important aspect to decide the admissibility of the credit. It is clear that though the freight was included in the total invoice value however the same was not included in the assessable value of the excisable goods sold by the appellant. Therefore, the ratio of the judgments in the case of M/S ULTRATECH CEMENT LTD. VERSUS C.C.E. KUTCH (GANDHIDHAM) 2019 (2) TMI 1487 - CESTAT AHMEDABAD and M/S SANGHI INDUSTRIES LTD. VERSUS C.C.E. KUTCH (GANDHIDHAM) 2019 (2) TMI 1488 - CESTAT AHMEDABAD is not directly applicable in the facts of the present case, where it was held that the Cenvat credit was allowed on one of the important facts that the freight element was included in the assessable value and excise duty was paid there upon. It was also fact in those cases that the assessee had not charged the freight separately to the customers. Time Limitation - HELD THAT - There is no dispute that the appellant is availing the Cenvat credit and declaring in their monthly returns. The issue involved is also of interpretation of Cenvat Credit Rules and on this issue there are number of cases were made out by the department. In these circumstances it cannot be said that the appellant had a mala fide intention to evade the excise duty by taking the wrong credit - there are no suppression of fact or misstatement on the part of the appellant. Therefore, the demand for the extended period, if any, in this case will not sustain. Penalty - HELD THAT - The appellant had no intention to evade duty, the appellant is also not liable for penalty under rule 15(2) of Cenvat Credit Rule 2004 read with section 11 AC of the Central Excise Act 1944. Accordingly, the entire penalty involved in the present case is set aside. The demand for the extended period is set aside remaining demand may be re-quantified by the adjudicating authority and recovered the same from the appellant in accordance with law - Appeal allowed in part by way of remand.
Issues involved:
Whether the appellant is entitled to Cenvat credit of Service Tax paid on Outward Transportation Service for clearance of Excisable Goods. Analysis: Issue 1: Entitlement to Cenvat Credit on Outward Transportation Service The appellant claimed Cenvat credit on service tax paid on transportation charges for goods sold on FOR basis. The appellant argued that since the freight was included in the invoice value and the sale was on FOR basis, the service tax on transportation charges should be admissible for Cenvat Credit. The appellant cited various judgments in support of their claim. On the other hand, the revenue contended that the demand for the extended period should be upheld. The tribunal considered previous cases like M/s. Ultratech Cements Limited and M/s. Sanghi Industries Limited, where Cenvat credit was allowed because the freight was included in the assessable value and excise duty was paid accordingly. However, in the present case, the invoice showed that the freight amount was charged separately to customers and not included in the assessable value. The tribunal concluded that the appellant was not entitled to Cenvat Credit based on the specific facts of the case. Issue 2: Interpretation of Cenvat Credit Rules and Limitation The appellant argued that the issue involved interpretation of Cenvat Credit Rules and there was a history of litigation on the admissibility of Cenvat Credit on outward transportation. They maintained that there was no intention to evade excise duty as they had declared the Cenvat Credit in their monthly returns. The tribunal acknowledged the interpretation issue but found that the appellant did not have a mala fide intention to evade duty. Therefore, the demand for the extended period was set aside, and the remaining demand was to be re-quantified by the adjudicating authority. Issue 3: Penalty under Cenvat Credit Rule Considering the appellant's lack of intention to evade duty, the tribunal ruled that the appellant was not liable for penalty under rule 15(2) of Cenvat Credit Rule 2004 read with section 11 AC of the Central Excise Act 1944. Consequently, the penalty involved in the case was set aside. In conclusion, the tribunal modified the impugned order, partially allowing the appeal and setting aside the demand for the extended period. The remaining demand was to be re-quantified, and the penalty was waived due to the appellant's lack of intention to evade duty.
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