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TMI Blog2016 (8) TMI 1064X X X X Extracts X X X X X X X X Extracts X X X X ..... ide except confirming demand of ₹ 13,848/- representing service tax amount passed on by appellant to the recipient unit. - Decided partly in favour of assessee - E/42021/2014 - Final Order No. 41424/2016 - Dated:- 26-8-2016 - Shri P.K. Choudhary, Judicial Member Shri V. Panchanathan, Advocate, For the Appellant Shri R. Veerabhadra Reddy, JC (AR) For the Respondent ORDER M/s. Exide Industries Limited, the appellant herein are engaged in the manufacture of Electric Storage Batteries and parts thereof and are availing Cenvat credit of duty paid on inputs, capital goods and input services as per Cenvat Credit Rules, 2004. They are holders of Central Excise registration and Service Tax Registration and discharge service tax li ability on GTA service 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 agree with it. He submits that a small portion of the demand for reversal of the credit on the GTA services pertains to the inputs which are removed as such by the appellants. In terms of Rule 3 (5) of the CENVAT Credit Rules, 2004, the appellants are required to reverse the credit availed on such inputs. The appellants did so. It is submitted by the counsel that when there is no provision to include the value of the freight in the case of the inputs removed as such, availing of credit either by the appellants or by the receiving unit, should not make any difference to the Revenue. The issue is, therefore, one of revenue-neutral entirely and consequently no demand can be made on the credit amount of ₹ 13,848/- pertaining to GTA services used on the removal of goods as such. In any case, GTA services pertain to the inputs stand transferred to the account of the receiving unit and consequently, the appellant is not at all liable to pay the service tax. Viewed accordingly no tax is payable, but paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id definition as the service used by the appellant assessee in this case relates to outward transportation of inputs/semi-finished goods. Since, they are not returned to the appellant assessee but used in the manufacture of final products and cleared on payment of duty at the respective units. As per the definition the eligible services 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 manufacturing units falls under the ambit of the definition of input service defined in sub-rule (l) Rule 2 of CCR, 2004 or othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, the said expression shall have the same meanings assigned to it in the Central Excise Act, 1944 or the Finance Act, 1944. The expression place of removal has been defined under Section 4 of the Central Excise Act, as per which it is (a) a factory (in case of factory gate sale); (b) a warehouse (in case goods permitted to be stored without payment of duty); or (c) a depot (in case of depot sale). Therefore, in case excisable goods are sold from depot after their clearance from the factory, the manufacturer is eligible to take credit of service tax paid on transportation of goods up to such depot. 2. In this regard a doubt has arisen as to whether a manufacturer manufacturing and clearing goods on payment of duty at specified rates (for example cement) or on the basis of valuation with reference to retail sale price (for example refrigerators), and selling the goods from a depot, is also eligible to take credit of service tax paid on transportation of goods up to such depot. The doubt appears to be based on reasoning that since such goods are not charged to duty on the basis of valuation under section 4 of the Central Excise Act, the definition of the expression place of rem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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