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TMI Blog2022 (5) TMI 904X X X X Extracts X X X X X X X X Extracts X X X X ..... 2008. The Hon'ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE, BELGAUM VERSUS M/S. VASAVADATTA CEMENTS LTD. [ 2018 (3) TMI 993 - SUPREME COURT] had considered the very same issue and held that the expression used in the definition is from the place of removal . It has to be from the place of removal upto a certain point. Therefore, tax paid on the transportation of the final products from the place of removal upto the that point whether it is depot or the customers premises has to be allowed. It was further held that the amendment carried out in the definition with effect from 1.4.2008 substituted the words from the place of removal with upto the place of removal . Thus, from 1.4.2008, CENVAT credit would be available upto the place of removal. The credit on outward transportation from the place of removal upto the buyers premises / dealers for period upto 31.03.2008 is eligible - Appeal allowed - decided in favor of appellant. - E/746/2007 and E/293 & 442/2008 - Final Order Nos. 40174-40176/2022 - Dated:- 18-5-2022 - Ms. Sulekha Beevi C.S., Member (Judicial) and Shri Raju, Member (Technical) Shri S. Muthuvenkataraman, Advocate and Shri R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant, it came to the notice of the department that they were availing CENVAT credit on the service tax paid on freight charges for the outward transportation of finished products upto the buyers premises as well as the dealers. The department was of the view that in terms of definition of input service , as it stood then, will not apply to the outward transportation of goods beyond the place of removal i.e. up to the premises of the customer / dealers and that the credit is not eligible. The Show Cause Notice issued for the different periods as above, proposes to disallow the credit and to recover the same along with interest and for imposing penalty. After due process of law, the original authority confirmed the demand, interest and imposed penalty. Against this, the appellants had filed appeals before the Tribunal. In the earlier round, the Tribunal relied upon the decision of the Hon'ble High Court of Karnataka in the case of CCE Service Tax, Bengaluru Vs. ABB Ltd. 2011 (23) STR 97 (Kar.) and held that the said activity of outward transportation of goods upto the buyers premises / dealers will fall within the definition of input service and that the credit i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal 8. From the above definition, it can be seen that prior to 1.4.2008, in sub-clause (ii) any service used by the manufacturer whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal, will fall within the definition of input service. 9. After 1.4.2008, the definition has been amended so that any service used for clearance of final products upto the place of removal will fall within the definition of input service. The department has taken a view that outward transportation of the goods is a post-sale expenditure and thus is an activity after manufacture. That therefore the credit in relation to the outward transportation of finished products upto the buyers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Andhra Sugars Ltd. (supra), the Hon'ble Supreme Court observed as under 6. As mentioned above, in these cases, the assessees are claiming Cenvat credit in respect of service tax paid on outward transportation from their factory to the premises of customers. As per the Department, outward transportation engaged for removal of goods from factory to customer premises cannot be considered as an input service since premises of customer is not recognized as a place of removal under the Central Excise Act. To put it differently, the Department contends that the outward transportation provided beyond the place of removal is not eligible for input service for availing Cenvat credit. 7. Having regard to the definition of input service that was prevailing at the relevant time i.e. prior to April 1, 2008, the aforesaid contention of the Department cannot be accepted. As per the said definition, service used by the manufacturer of clearance of final products from the place of removal to the warehouse or customer s place etc., was exigible for Cenvat credit . This stands finally decided in Civil Appeal No. 11710 of 2016 (Commissioner of Central Excise Belgaum v. M/s. Vasavadat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, 2004 and are not defined therein but are defined in the Central Excise Act, 1944 or the Finance Act, 1994, they shall have the same meaning for the Cenvat Credit Rules as assigned to them in those Acts. The phrase place of removal is defined under Section 4 of the Central Excise Act, 1944. It states that, - place of removal means - (i) a factory or any other place or premises of production or manufacture of the excisable goods; (ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be stored without payment of duty; (iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory; from where such goods are removed. It is, therefore, clear that for a manufacturer/consignor, the eligibility to avail credit of the service tax paid on the transportation during removal of excisable goods would depend upon the place of removal as per the definition. In case of a factory gate sale, sale from a non-duty paid warehouse, or from a duty paid depot (from where the excisable goods are sold, after their clearance from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d evidences placed before us, we find that the decision of the Hon'ble Supreme Court is squarely applicable to the facts of this case. Moreover, the Hon'ble jurisdictional High Court in the case of M/s. Bata India Ltd. Vs. Commissioner of Customs Central Excise, Chennai III 2019 (24) GSTL 326 (Mad.) had occasion to consider the very same issue as to whether credit is eligible on the outward transportation of goods upto the customer s premises prior to the period 1.4.2008. The Hon'ble High Court applied the principle laid down in the case of M/s. Vasavadatta Cements Ltd. (supra) and The Andhra Sugars Ltd. 9supra) and held that the credit is eligible. The relevant portion of the order is reproduced as under:- 19. To arrive at the correct conclusion, the Adjudicating Authority should have taken note of the decision of the Hon ble Supreme Court in the case of CCE, Belgaum v. Vasavadatta Cements Ltd. [reported in (2018) 52 GSTR 232 = 2018 (11) G.S.T.L. 3 (S.C.)]. The issue, which fell for consideration before the Hon ble Supreme Court was as to what interpretation has to be given to input services, which is defined in Rule 2(l) of the CCR. The appeals before the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... final product from the place of removal upto the first point, whether it is the depot or the customer, has to be allowed and we find that the issue addressed by the Hon ble Supreme Court in the decision in the case of Ultra Tech Cement Ltd., pertains to the first limb of the definition under Rule 2(1) of the CCR. In other words, the issue involved in that decision was regarding availment of Cenvat credit on goods transport agency service availed for transport of goods from the place of removal to buyer s premises. In the case of Ultra Tech Cement Ltd., the Cenvat credit on tax paid upto the customer s premises was disallowed, as it was found that the factory gate is to be determined as the place of removal . Therefore, the larger question would be as to whether the assessee would have been non-suited based on the decision in the case of Ultra Tech Cement Ltd. In our considered view, the assessee should not be non-suited in the light of the said decision for more than one reason. 22. Firstly, the modus operandi of the assessee requires to be examined by the Adjudicating Authority i.e. establishment of the RDCs and the WSDCs. The assessee s specific case is that the point of s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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