2021 (12) TMI 790 - AT - Central Excise

CENVAT Credit - input services - transportation of footwear from its Regional Distribution Centres (RDCs) / Corporate Office to their retail outlets - HELD THAT - In the absence of specific examination of facts, I am unable to endorse the demand being re-confirmed in the impugned orders. When the Hon ble High Court required re-examination into the facts first, the priority of the Adjudicating Authority should have been to ascertain the facts along with supporting documents, hear the appellant and then arrive at a proper conclusion upon such examination. Further, though there is an observation in the impugned orders that the manufacturing activities would cease as soon as the goods were transported to the RDCs / Corporate Office after manufacturing, but however, there is no supporting evidence placed on this to establish that it is at these RDCs / Corporate Office that the clearance of goods in the form of sale took place. Rather, there is nothing placed on record to indicate the basis for such a conclusion. Matter remanded back to the file of the Adjudicating Authority, who shall examine the issue afresh - appeal allowed by way of remand.

Summary

Issues:
Denial of CENVAT Credit on transportation of footwear from Regional Distribution Centres to retail outlets.

Analysis:

Issue 1: Denial of CENVAT Credit
The appellant filed appeals against Orders-in-Original denying CENVAT Credit on transportation of goods. The appellant argued that the denial was incorrect as there was no sale until goods reached retail outlets. The appellant cited relevant provisions of CENVAT Credit Rules, 2004, defining 'place of removal' and 'sale'. The appellant also distinguished their case from the precedent of M/s. Ultra Tech Cement Ltd. The appellant referenced various decisions and circulars supporting their position.

Issue 2: Judicial History
The case involved a second round of litigation before the forum. Previous orders confirmed denial of CENVAT Credit on GTA Services based on the decision in M/s. Ultra Tech Cement Ltd. The appellant appealed to the High Court, which remanded the case for fresh adjudication. The impugned orders, following the High Court's directions, resulted in the denial of CENVAT Credit, leading to the current appeals.

Issue 3: Remand Order
The Tribunal noted the High Court's remand order directing a thorough examination of the appellant's modus operandi and the identification of the point of sale. The Tribunal observed that the Adjudicating Authority failed to conduct this examination as directed. The Tribunal emphasized the importance of fact-finding before applying legal principles. The Tribunal found the Commissioner's orders lacking in a specific examination of facts and evidence supporting the denial of CENVAT Credit.

Conclusion:
The Tribunal set aside the impugned orders and remanded the matter back to the Adjudicating Authority for a fresh examination in line with the High Court's directions. The Tribunal emphasized the need for a proper assessment of facts, supporting documents, and a fair hearing for the appellant. The Tribunal allowed the appeals by way of remand, leaving all contentions open for further consideration.