2024 (9) TMI 1646 - AT - Central Excise

CENVAT Credit - freight charges for outward transportation - credit is availed beyond the time limit of 6 months / 1 year - time limitation. CENVAT Credit - freight charges for outward transportation - HELD THAT - The very same issue was considered by the Larger Bench of the Tribunal in M/S. THE RAMCO CEMENTS LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, PUDUCHERRY 2023 (12) TMI 1332 - CESTAT CHENNAI-LB in which it was held that after the ascertainment of the place of removal, the assesse would be eligible for credit if the place of removal is buyer s premises / depots. Following the same, the Tribunal in the appellant s own case M/S. THE RAMCO CEMENTS LTD. VERSUS THE COMMISSIONER OF CGST CENTRAL EXCISE, TRICHY 2024 (7) TMI 680 - CESTAT CHENNAI had remanded the matter. Accordingly, this issue requires to be remanded to the adjudicating authority who is directed to ascertain the place of removal in accordance with Large Bench decision of the Tribunal and also to consider whether the appellant is eligible for credit. Disallowance of credit alleging that the credit is availed beyond the time limit of 6 months / 1 year - HELD THAT - In order to protect their right of credit, they were availing and reversing the credit to avoid unnecessary proceedings. The credit has been denied for the reason that it is availed beyond the period of time limit prescribed under sub-rule (7) of Rule 4 of CCR 2004. It has been held that the time limit prescribed cannot apply to invoices issued prior to the date on which the restriction came into force. This issue also needs to be looked into by the adjudicating authority. The issue of delay in taking credit was considered by the Tribunal in the Final Order dt. 10.07.2024 and the matter was remanded for reconsideration by the adjudicating authority. The impugned order is set aside. The appeal is allowed by way of remand to the adjudicating authority.

Summary

Issues:
1. Eligibility of cenvat credit on service tax paid on freight charges for outward transportation.
2. Disallowance of cenvat credit taken beyond the prescribed time limit.
3. Invocation of extended period alleging suppression of facts.
4. Remand of issues for reconsideration by the adjudicating authority.

Detailed Analysis:
1. The appellant availed cenvat credit on service tax paid on freight charges for outward transportation of goods to the buyer's premises. The Department contended that such credit was not eligible as the buyer's premises were not considered 'the place of removal.' Show cause notices were issued for disallowance of credit. The appellant argued citing a Larger Bench decision that if the place of removal is the buyer's premises, the credit is eligible. The Tribunal previously remanded the matter to ascertain the place of removal. The Tribunal directed remanding the issue to the adjudicating authority for further consideration.

2. The Department noticed the appellant availed cenvat credit in lump sum amounts beyond the prescribed time limit. The appellant argued that the credit was eligible as per the pre-amendment definition of input services. They reversed and restored the credit based on legal interpretations and precedents. The Tribunal directed remanding the issue to the adjudicating authority for reconsideration.

3. The appellant argued that the issue was interpretational, with various litigations and a Supreme Court case involved. A circular clarified the eligibility of credit, indicating no intention to evade duty. The appellant disputed the invocation of the extended period alleging suppression of facts without any positive act of suppression mentioned in the show cause notice.

4. The Tribunal remanded all three issues, including the eligibility of credit on freight charges, disallowance based on the time limit, and the invocation of the extended period, for reconsideration by the adjudicating authority. The impugned order was set aside, and the appeal was allowed by way of remand for further examination and decision by the adjudicating authority.