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TMI Blog2014 (10) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... tely availed Cenvat credit on the service tax paid on the freight charges borne for its FOR sales. - Following decision of Ultratech Cement Ltd. vs. CCE, Raipur reported in [2014 (8) TMI 788 - CHHATTISGARH HIGH COURT] - Decided in favour of Assessee. Adjudication and drafting of adjudication orders requires training; and incompetent departmental adjudication ill serves the interests of the State. Apart from accentuating the appellate docket load, such casual orders contribute to faith deficit in the process of departmental education and imperils the due process of law. The appropriate authorities may consider this pathology writ large in departmental adjudication. For this purpose, we direct that a copy of this judgment be marked to the Board of Central Excise and Customs and to the Secretary (Revenue), Ministry of Finance, Department of Revenue, for consideration. - Appeal No. 58979 of 2013 - Final Order No. 53497/2014 - Dated:- 3-9-2014 - Mr. G. Raghuram and Shri Rakesh Kumar, JJ. For the Appellant : S/Shri Hemant Bajaj and B.L. Narasimhan, Advocates For the Respondent : Shri M.S. Negi, Authorized Representative (DR) JUDGEMENT Per. Justice G. Raghura ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transactional and other documents furnished by the assessee, including sample copies of declarations issued by customers, in substantiation of this contention. (Annexure V to the reply, to the show cause notices). 4. The assessee also relied on the judgment of the Punjab Haryana High Court in Ambuja Cements Ltd. vs. Union of India - 2009 (14) S.T.R. 3 (P H), which reversed a contrary view expounded by this Tribunal in Gujarat Ambuja Cements Ltd. vs. CCE, Ludhiana - 2007 (6) S.T.R. 249 (Tri. - Del.). The Punjab Haryana High Court answered the questions of law in favour of the assessee by holding that in case of FOR destination sales where the entire cost of freight is paid and borne by the manufacturer, the same would be an input service with the meaning of Rule 2 (l) of the Cenvat Credit Rules, 2004. The High Court also referred to Board Circular No. 97/8/2007-ST dated 23/08/2007, which was issued subsequent to the Tribunal judgment in Gujarat Ambuja Cements Ltd. (supra). This Circular clarified [notwithstanding the Tribunal s view] as follows:- It is, therefore, clear that for a manufacturer/consignor, the eligibility to avail credit of the service tax paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he party has failed to fulfill the conditions as enshrined under Section 4 of the Central Excise Act, 1944, i.e., regarding the place of removal. The above said Act nowhere mentions the consignees doorstep as the place of removal and the fulfillment of the conditions of the Section 4 of the above said Act is sine qua non for being eligible for taking the Service Tax Credit on Outward GTA Services. Furthermore, the CBEC, vide their above said Circular No. 97/8/2007 dated 23/08/2007, has also explicitly laid down the following conditions for availment of the Service Tax CENVAT Credit on outward GTA Services :- (i) the ownership of goods and the property in the goods remained with the seller of the goods till the delivery of the goods in acceptable condition to the purchaser at his doorstep ; (ii) The seller bore the risk of or damage to the goods during transit to the destination and ; (iii) the freight charges were an integral part of the price of goods. 31. In such cases, the credit of the service tax paid on the transportation upto such place of sale would be admissible if it can be established by the claimant of such credit that the sale a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticular condition No. (iii), regarding submission of proof of freight charges being an integral part of the price of the goods. Conveniently, either by design or default, the learned Commissioner fails to advert to the specific contentions and the material evidence submitted by the assessee [noticed in paragraphs G H earlier in the impugned order], while recording this wholly perverse conclusion. At para 32 of the order, the reference and reliance placed by assessee on the several precedents including the judgment of the Punjab Haryana High Court in Ambuja Cements Ltd. (supra) is brushed aside on the ground that these cases deal with a different matter and are not relevant to the instant case. A more casual and negligent approach to adjudication and disregard for binding precedents is perhaps difficult to replicate. The impugned order records the operative portion, disallowing Cenvat credit and directing its recovery alongwith interest and penalty, in para 33. 8. Paras 1 to para 29 of the impugned order chronologically enumerate the facts relating to initiation of proceedings, contentions of the assessee, the case of the Department and the defence by the assessee alongwith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... variably be the factory gate. The place of removal would depend upon the specific transaction in issue and where the removal is pursuant to sales on FOR basis, with the risk in the goods manufactured being borne by the manufacturer till delivery to the customer at its premises and where the composite value of sales include the value of freight involved in delivery at the customers premises, the place of removal would not be at the factory gate, but at the customer s premises, held the High Court. 12. On the above premises and in the light of the judgment of the Punjab Haryana High Court in Gujarat Ambuja Cements Ltd. vs. CCE, Ludhiana (supra) and the inter-partes judgment, of the Chhattisgarh High Court in Ultratech Cement Ltd. vs. CCE, Raipur (supra), considered in the light of the clear and specific pleadings and the evidence marshaled by the assessee in support of its pleadings (to establish that the transactions of the assessee in the cement manufactured by it was all on FOR sales basis); the certificates issued by assessee s customers to this effect and adverted to in paragraphs H.13 of the impugned order, the conclusion is irrestible that sales by the assessee were on F ..... X X X X Extracts X X X X X X X X Extracts X X X X
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