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TMI Blog2024 (4) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... e definition of 'Input Service' under Rule 2(1) of Credit Rules? (c) Whether in the facts and circumstances of the case, the Tribunal was justified in rejecting the appeal filed by the Appellant solely on the basis of the judgment of Apex Court in the case of CCE v. Ultra Tech Cements Ltd. [Civil Appeal No. 11261 of 2016]? (d) Whether in the facts and circumstances of the case, the Tribunal was justified in upholding the levy of interest under Section 11AB of the Act?" The background facts 3) Before we deal with the said questions of law, briefly we shall set out the factual background leading to this appeal. 4) The appellant is a company incorporated and registered under the Companies Act, 1956 and is primarily engaged in manufacturing of industrial gases such as Liquid Oxygen, Liquid Nitrogen, Liquid Medical Oxygen and Liquid Argon falling under Chapter 28 of the Central Excise Tariff Act, 1985. 5) For its operations, the appellant had entered into an agreement with the customers for the manufacture of various gases mentioned above for delivery of it's products upto the premises of the customers. 6) The case of the appellant is that as per purchase orders pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said allegations in its replies to the show cause notices and contended that the place of removal is not the factory gate and it is the buyers' premises only as the sale of gases terminates at the buyers' premises. It contended that due to the peculiar nature of facts of the instant case, the place of removal cannot be the factory gate as the responsibility to transfer the gases to the buyers' premises is that of the appellant, and the said responsibility cannot be shifted to the buyers. It also relied on certain circulars issued by Central Board of Excise and Customs (CBEC) issued from time to time. It also contended that no penalty should be imposed and no interest can also be levied upon it. The order of the primary authority dt. 28.2.2014. 12) The Assistant Commissioner passed Order-in-Original No. 10-12/D/AC/SML/2013 dt. 28.02.2014, directing recovery of CENVAT credit amounting to Rs. 6,90,027/- for the period from March 2011 to September 2012 alongwith applicable interest under Rule 14 of CENVAT Credit Rules, 2004 read with Section 11 AB/AA of the Act and also imposed penalty of Rs. 6,90,027/- under Rule 15 of the CENVAT Credit Rules, 2004 read with Section 11AC of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence to prove that the ownership of the goods sold to their buyers remained with them till the same had been handed over to their buyer at the door step and so they were not entitled to any relief. Appeal to the Customs, Excise and Service Tax Appellate Tribunal, Chandigarh 17) Challenging the said judgment of the First Appellate Authority, the appellant had filed Appeal No. E/60934 of 2017 to the Customs, Excise and Service Tax Appellate Tribunal, Chandigarh. 18) The said appeal was dismissed on 27.02.2018. 19) The Tribunal held that the issue arising for consideration is "whether the appellant is eligible for input service credit on outward transportation of their final product from their factory to buyers' premises?" and that the said issue is covered by the judgment of the Supreme Court in CCE vs. Ultra Tech Cement Ltd. (2018) 2 SCC 721, dt. 01.02.2018. According to the Tribunal, the issue of input service credit availed for transport of goods from place of removal to buyers' premises was considered by the Supreme Court as per the amended Rule 2(1) of the CENVAT Credit Rules, 2004 in this judgment and that the Supreme Court held that a manufacturer/consignor can take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrangement is purely provisional arrangement considering special nature of goods and finalization of Daily Stock Account at the point of clearance from the factory itself indicates that the place of removal is the factory gate. 21) The Tribunal, however, held that levy of penalty under Section 11AC is not justified as the elements of Section 11AC do not exist in the present case and thus set aside the penalty imposed under the said provision while upholding the demand of CENVAT Credit and levy of interest thereon. The instant Appeal 22) Challenging the same, this appeal is filed. 23) Learned counsel for the appellant has placed reliance on the Circular No. 1065/4/2018-CX dt. 08.06.2018 issued by the Central Board of Indirect Taxes & Customs (CBIC). He pointed out that the said Circular of the Board considered the judgment in Ultra Tech Cement Ltd. (1 supra) relied upon by the Tribunal and specifically carved out an Exception to the principles laid down in the said decision stating as under:- "4. Exceptions: (i) The principle referred to in para 3 above would apply to all situations except where the contract for sale is FOR contract in the circumstances identical to the j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principle of law, thus, is crystal clear. It is to be seen as to whether as to at what point of time sale is effected, namely, whether it is on factory gate or at a later point of time i.e. when the delivery of the goods is effected to the buyer at his premises. This aspect is to be seen in the light of the provisions of the Sale of Goods Act by applying the same to the facts of each case to determine as to when the ownership in the goods is transferred from the seller to the buyer. The charges which are to be added have put up to the stage of the transfer of that ownership inasmuch as once the ownership in goods stands transferred to the buyer, any expenditure incurred thereafter has to be on buyer's account and cannot be a component which would be included while ascertaining the valuation of the goods manufactured by the buyer. That is the plain meaning which has to be assigned to Section 4 read with the Valuation Rules. 14. In the present case, we find that most of the orders placed with the respondent-assessee were by the various government authorities. One such order i.e. order dated 24-6-1996 placed by Kerala Water Authority is on record. On going through the terms and con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n delivery and till such time of delivery, seller alone remained the owner of goods retaining right of disposal, benefit has been extended by the Apex Court on the basis of facts of the cases. 32) This circular binds the respondents though it had been issued by the CBIC on 8.6.2018 after the decision was rendered in the instant case by the CESTAT on 27.2.2018. 33) In Ranadey Micronutrients etc. vs. Collector of Central Excise AIR 1997 SC 69, the Supreme Court held that in view of Section 37B of the Central Excise & Salt Act, 1944, instructions issued by the Board in order to ensure uniform practice of assessment of excisable goods throughout the country get statutory status and significance, and they are binding on officers of the Central Excise Department. 34) Similar view was also taken by the Supreme Court in Commissioner of Customs, Calcutta and others vs M/s Indian Oil Corporation Ltd. & another (2004) 3 SCC 488, Commissioner of Central Excise, Bolpur vs M/s Ratan Melting & Wire Industries MANU/SC/8792/2008. 35) We may also point out that the decisions of the Supreme Court in EMCO Ltd. (2 supra) and M/s Roofit Industries Ltd. (3 supra) which specifically dealt with FOR con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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