9911796707
TMI Blog2018 (6) TMI 1414X X X X Extracts X X X X X X X X Extracts X X X X ..... f input service credit. GTA services availed beyond the RDCs - Held that:- There are two different situations, one before 1.4.2008 and after that date, by virtue of amendment vide clause (ii) of Rule 2(l) by Notification No.10/2008-CE (NT) dt. 1.4.2008. By this amendment, the phrase “from the place of removal” was substituted “up to the place of removal”. The issue of whether the assessees are eligible for service tax credit in respect of the GTA services beyond place of removal has been mired in litigation for quite some time. The appellants will be eligible for input service credit in respect of GTA services availed beyond their RDCs but only upto 31.3.2008. For all services availed on or after 1.4.2008, they then by consequence cannot avail input service credit on such GTA services - the input services which have been disputed except for GTA beyond the RDCs are very much eligible services for the purpose of Rule 2(l), whether before 1.4.2011 or after that date. Penalty - Held that:- Issues relating to eligibility of cenvat credit of many of these input services were a matter of litigation. Hence the matter has to be considered as one of interpretation - penalties set aside. Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty ₹ 2000/- U/R 15 (3) Interest Levied Rule 14 of Cenvat Credit Rules, 2004 r/w Section 11A(1) & Section 11 AB of Central excise Act, 1944. Show Cause Notice SCN No.68/2009 dated 16.09.2009 Reply/Objections filed 12.10.2009 Period April, 2008 Amount Involved Rs.24,88,915/- Penalty ₹ 2000/- U/R 15 (3) Interest Levied Rule 14 of Cenvat Credit Rules, 2004 r/w Section 11A(1) & Section 11 AB of Central excise Act, 1944. Show Cause Notice SCN No.42/2009 dated 04.05.2009 Reply/Objection filed 30.06.2017 Period March, 2009 to September, 2009 Amount Involved Rs.1,30,72,738/- Penalty ₹ 2000/- U/R 15 (3) Interest Levied Rule 14 of Cenvat Credit Rules, 2004 r/w Section 11A(1) & Section 11 AB of Central excise Act, 1944. Show Cause Notice SCN No.12/2010 dated 18.02.2010 Reply/Objection filed 03.03.2010 Order-in-Original Common O-in-O No.5/2010 (CE) dated 10.05.2010 2. Appeal No. E/193/2012 Period October, 2009 to June, 2010 Amount Involved Rs.96,82,781/- Penalty ₹ 9,67,190/- U/R 15 (1) Interest Levied Rule 14 of Cenvat Credit Rules, 2004 r/w Section 11 AB of Central excise Act, 1944. Show Cause Notice SCN No.58/2010 dated 01.11.2010 R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmon O-in-O No.46&47/2016 (CE) dated 23.06.2016 9 Appeal No. E/42521/2016 Period December, 2014 to August, 2015 Amount Involved Rs.99,86,448/- Penalty ₹ 8 Lakhs U/R 15 (1) Interest Levied Rule 14 of Cenvat Credit Rules, 2004 r/w Section 11AA of Central excise Act, 1944. Statement of Demand SOD No.1/2016-CE- dated 01.01.2016 Reply/Objections filed 16.06.2016 Order-in-Original Common O-in-O No.46 &47/2016 (CE) dated 23.06.2016 2. Today when the matter came up for hearing, on behalf of the appellants, Ld. Senior Counsel Shri R. Venkatraman assisted by Ms. Lakshmi Sriram made oral and written submissions which can be broadly summarized as under : i) The appellant did not distribute the input service credit exclusively on foot wears that were exempt. ii) Appellant has taken cenvat credit only based on ISD challans issued by their Headquarters and RDCs. iii) In respect of credit availed on GTA beyond the RDCs, Ld. Senior Advocate/counsel submits that for the period prior to 1.4.2008, the Hon'ble Apex Court in CCE Belgaum Vs Vasavadatta Cements Ltd. - [2018] (52 GSTR 232 (SC) has clearly laid down that such credit availed for transport of final product from the pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cture of final products. Ld. AR points out that the phrase 'relating to business' which forms part of the definition of 'input services' in Rule 2(l) does not find any place in the amended definition w.e.f. 1.4.2011. iii) The services received at the depot like cab operator service for bringing the office staff of RDCs / corporate office and other services received at the RDCs are not services in or in relation to manufacture of the goods and they will not be eligible. iv) The concept of 'place of removal' does not find a place in Section 4A of the Central Excise Act, 1944 which concerns clearance of goods under M.R.P. Valuation. As the appellant's goods are under M.R.P they cannot have a place of removal as RDCs and hence credit availed on these services that have been received beyond the factory gate and upto the RDCs will not be eligible. 3. Heard both sides and have gone through the facts. 4. From the facts, it is seen that the disputed services are as follows : a) At the Regional Distribution Centre from North (Faridabad) : i) Telecom - telephones installed and used at Faridabad ii) Maintenance and repair : - Repair and maintenance of office and office equipments at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kolkata. iv) Transport :- Freight charges incurred for the transport of goods from Kolkata to various retail shops. v) C & F :- Engaged for dispatch of materials from the Centre at Kolkata to various places. vi) Security services :-Security personnel engaged at distribution centre at Kolkata. vii) Manpower recruitment services :-Manpower engaged for the work at Kolkata. e) At the Corporate Office, Gurgaon i) C & F :- Charges incurred for the goods cleared from Corporate office to different RDC's at various places. ii) Rent : rental charges of corporate office building iii) General Insurance : Insurance of materials at Corporate Office at Gurgaon iv) Maintenance :- Maintenance charges of Corporate office v) Security:- Security personnel engaged for the services at corporate office vi) Courier and Cargo : Courier engaged at corporate office and cargo for movement of goods from corporate office to various places . vii) Testing services :- This service is rendered at corporate office for the testing being carried out on the products found to be defective at the hands of customers from different places viii) Life insurance services : Services relating to Medicl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther the assessees are eligible for service tax credit in respect of the GTA services beyond place of removal has been mired in litigation for quite some time. However by the Hon'ble Apex Court's two land mark judgments in Ultratech and Vasavadatta Cements (supra) the issue has now been settled once for all. The Apex Court in Vasavadatta Cements has held that credit in respect of such GTA services is eligible prior to the amendment i.e. prior to 1.4.2008. In Ultratech Cement (supra), the Apex Court held that benefit which was admissible even beyond the place of removal prior to 1.4.2008 gets terminated at the place of removal and doors to the cenvat credit of input tax paid gets closed at that place. Viewed in this light, we have no hesitation in holding that the appellants will be eligible for input service credit in respect of GTA services availed beyond their RDCs but only upto 31.3.2008. For all services availed on or after 1.4.2008, they then by consequence cannot avail input service credit on such GTA services. We find that the earliest period in all these SCNs is 1.4.2008, in which case, the law as laid down by the Ultra Tech Cement judgement (supra) will apply. Hence appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s one of interpretation. This being the case, following settled law, we hold that there cannot be any penalty in respect of these cases. So ordered. 8. To sum up, appeals are partly allowed on the following terms, with consequential benefits, if any, as per law : i) Input service credit availed by the appellant in respect of the GTA services beyond RDCs / Corporate office from 1.4.2008 are not eligible for the purpose of Rule 2(l) as it stood after that date. The impugned orders confirming the demands in respect of these input services with applicable interest are upheld and the appeals on this score are dismissed. ii) Input service credit availed in respect of all the other disputed services are found eligible for the purpose of Rule 2(l) before and after 1.4.2011. Impugned orders denying credit availed on these services will therefore not sustain and will have to be set aside which we hereby do. Appeals in respect of these input services succeed and are allowed with consequential benefits, if any, as per law. iii) Penalties imposed under various provisions of Finance Act, 1994 are set aside. iv) As all the appeals get disposed by this order, the MA seeking stay of operation ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
