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TMI Blog2024 (7) TMI 1253X X X X Extracts X X X X X X X X Extracts X X X X ..... outward freight under GTA services against the appellant and in favour of the Revenue. 2. The facts of the case are that the appellant being manufacturer of the corrugated boxes established the unit in the year 1990 and for which, purchased the plant and machinery vide invoice no.284 dated 20.12.1990 from M/s. Nagpal Industries for a sum of Rs.1,64,190/- without payment of excise duty and without availing the cenvat credit at the time of purchase of the machinery. The appellant sold the old machinery as 'scrap' for Rs.2,65,000/- under invoice no.180 dated 09.07.2016, however, did not pay the central excise duty of Rs.33,125/- on the said transaction value in terms of Rule 3(5A)(b) of Cenvat Credit Rules, 2004 [CCR, 2004] . 3. The appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed once again confirming the demand along with interest and penalty. The matter was re-adjudicated before the Commissioner (Appeals) and by the impugned order, the demand was upheld. Being aggrieved, the appellant has preferred the appeal before this Tribunal. 4. Heard Ms. Priyanka Goel, learned counsel for the appellant and Shri Arun Sheoran, learned Authorised Representative for the respondent. 5. The submissions of the learned counsel for the appellant is that the machinery was purchased without payment of central excise duty as the same was not charged in the invoice supplied by the supplier and no cenvat credit was availed and, therefore, while selling the said machinery, the question of levying the duty does not arise an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amely:- (i) for computers and computer peripherals: for each quarter in the first year @ 10% for each quarter in the second year @ 8% for each quarter in the third year @ 5% for each quarter in the fourth and fifth year @ 1% (ii) for capital goods, other than computers and computer peripherals @ 2.5% for each quarter: Provided that if the amount so calculated is less than the amount equal to the duty leviable on transaction value, the amount to be paid shall be equal to the duty leviable on transaction value. (b) If the capital goods are cleared as waste and scrap, the manufacturer shall pay an amount equal to the duty leviable on transaction value.] " Here, the machinery sold was 'capital goods' and the provisions quoted a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax paid on outward freight and utilizing the same towards the payment of duty, it is necessary to consider the statutory provisions. In this regard Rule 2(l) of CCR defines 'input service' as under:- "2(l) "input service" means any service, - (i) used by a provider of output service for providing an output service; or (ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealer; (t) words and expressions used in these rules and not defined but defined in the Excise Act or the Finance Act shall have the meanings respectively assigned to them in those Acts." The reading of the definition of 'input service' shows that the outward transportation 'upto the place of removal' only qualifies to be an 'input service'. In the present case, it is an admitted position that the appellant availed the cenvat credit of service tax paid on outward transportation beyond the 'factory gate'. In terms of the aforesaid provisions, the sale at the 'factory gate' is not eligible to avail the cenvat credit of outward transportation and the appellant, therefore, wrongly utilized such credit towards payment of excise duty though t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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