9911796707
TMI Blog2016 (8) TMI 1064X X X X Extracts X X X X X X X X Extracts X X X X ..... vice used by them. They have factories at Hosur, Tamilnadu and other places throughout India. The appellant herein is Exide Industries Limited, Hosur Unit. Hosur unit transfers inputs/semi-finished/intermediaries to other factories on payment of excise duty. The receiving unit make use of these goods to manufacture finished goods and clears them on payment of duty. The appellant paid the freight on such transfers and availed Cenvat credit of the service tax paid on such transportation. On verification of accounts of the appellant assessee it was noticed that they had taken credit of service tax paid on outward freight service during the period March 2008 to March 2011. Hence four show cause notices dated 31.03.2009, 02.03.2010, 25.10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , availing of credit on GTA services for transfer of inputs to other units by Hosur unit is in order. He further submitted that such GTA services availed are relating to the business of the manufacturer. He further submitted that the credit availed by the appellants is in order as per the provisions of Rules 2 (l) (ii) and 3 (1) of Cenvat Credit Rules, 2004, as any service used by a manufacturer whether directly or indirectly in or in relation to the manufacture of final products from the place of removal and all services covered under the inclusive part of the definition viz. inward transportation of inputs and capital goods and outward transportation up to the place of removal are eligible input services. The appellate authority did not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it so availed. In this system of accounting, the appellants transfer the cost pertaining to the transportation of inputs to the account of the receiving unit. During the period in question the appellant had transferred in the said manner cost to the tune of Rs. 4,62,597/- pertaining to the transportation expenses of the inputs to the receiving units. In this manner, it is the receiving unit which pays GTA and therefore, they are also eligible to avail the credit of service tax paid. Hence if the demand raised against the appellants for reversal of credit, the appellants must be allowed to avail the credit at their receiving unit. In this view also the entire demand is revenue-neutral. He relies on CBEC's Letter F.No.137/3/2006-CX. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices are the services used directly or indirectly, in or in relation to the manufacture of their final products and clearance of final products upto the place of removal. Here in the case on hand, the services used by the appellant assessees are the services used for outward transportation of their inputs/semi-finished goods. Hence, the order passed by the adjudicating authority for recovery of ineligible credit availed by the appellant assessee is proper and in accordance with law. Therefore, the impugned order is sustainable. 4. Heard both sides and perused the records. The short issue involved in the case on hand is whether the transportation of inputs/semi-finished goods/intermediaries by the appellant assessee to their manufacturin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. There cannot be a different view with regard to the eligibility of Cenvat credit of outward transportation is concerned. I also find from the CBEC letter cited by the counsel that in case of depot sale of goods, credit of service tax paid on the transportation of goods upto such depot would be eligible. The said CBEC's letter dt. 2.2.2006 is reproduced as under :- Letter F.No. 137/3/2006-CX. 4, dated 2-2-2006 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi Subject : Eligibility of CENVAT credit of service tax paid on goods transported from factory to depot and sold therefrom - Reg. It may be recalled that under the CENVAT Credit Rules, 2004 (hereinafter referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The matter has been examined at the level of the Central Board of Excise and Customs. It has been observed that the availment of credit and valuation for payment of duty are two independent issues. Further, the provisions under rule 2(t) of the CENVAT Credit Rules refers to definitions under the Central Excise Act, 1944 and the Finance Act, 1994 for uniform understanding of the words and phrases used in the Credit Rules. Therefore, if an expression is not defined in the Credit Rules but is defined under a particular section of the Central Excise Act, it shall be applicable to all goods for purposes of the Credit Rules, irrespective of whether or not the said section is applicable for the purposes of working out the duty on such goods. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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