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Judgment
The present appeal is directed against the impugned order dated 08/05/2019 passed by the Commissioner (Appeals) whereby the Commissioner (Appeals) has rejected the appeal of the appellant. Briefly the facts of the present case are that the appellants are engaged in the manufacture of Cement and clinker. It was noticed by the Departmental officers that the appellant was availing cenvat credit of service tax paid on the outward transportation of goods from the factory/bulk terminal/depot to their customer's premises. It appeared that such availment of cenvat credit in relation to service tax paid on outward freight in relation to clearance of final product was wrong. Department entertained the view that as per Rule 2(a)(ii) of Cenvat Credit Rules, 2004, appellant is entitled to avail cenvat credit on outward transportation only up to the place of removal and in the present case, the appellant has availed cenvat credit up to the place of customer's place which he was not eligible. Accordingly, a show-cause notice dated 28/04/2009 was issued for the period from April 2008 to March 2009 demanding therein total cenvat credit of Rs.36,28,736/- (Rupees Thirty Six Lakhs Twenty Eight Thousand Seven Hundred and Thirty Six only) along with interest and proposal for imposition of penalty. Original authority after following the due process, vide Order-in-Original dated 07/09/2018 confirmed the demand of cenvat credit of Rs.36,28,736/- (Rupees Thirty Six Lakhs Twenty Eight Thousand Seven Hundred and Thirty Six only) along with interest and imposed total penalty of Rs. 2,000/- (Rupees Two Thousand only) under Rule 15(3) of the Cenvat Credit Rules, 2004. Aggrieved by the said order, appellant filed appeal before the Commissioner who rejected the said appeal. Hence, the present appeal.
Heard both the parties and perused the records.
Learned counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without properly appreciating the facts and the law. He further submitted that onus of proof lies on the Department to prove that in the appellants' case customer's premises is not the place of removal because the Department is alleging that the appellants are not entitled for availment of credit of service tax paid on transportation of goods beyond the place of removal. He further submitted that the appellants are eligible for cenvat credit of service tax on outward transportation up to the customer's premises for the period w.e.f. 01/04/2008. He then referred to the definition of 'input service' as provided in Rule 2(l) of Cenvat Credit Rules as well as 'place of removal' as defined in Clause (c) of sub-section (3) of Section 4 of the Central Excise Act and then submitted that mere reading of the definition makes it clear that where the goods are not sold at the factory gate but from some other place after their clearance from the factory, then the 'place of removal' would be such other place. It is his further submission that under the Central Excise Act, 1944 'sale' means transfer of possession of goods from one person to another for a consideration and if the same provision is applied to the 'place of removal', then it emerges that in case the possession of goods is transferred by the manufacturer to its buyer at the buyer's doorstep for a consideration, then the goods should be treated to have been sold at the buyer's doorstep and in such a situation, the 'place of removal' would be buyer's premises and not the factory/depot of the manufacturer. He further submitted that the freight charges by the appellant were an integral part of the price of the goods. He also submitted that High Court of Punjab & Haryana at Chandigarh has allowed the appeal in the identical matter in case of M/s. Ambuja Cements Ltd. In support of his submission, the appellants relied upon the following decisions:
· CCE V. Ramesh Food Products - 2004 (174) E.L.T. 310 (S.C)
· Govindanaik G. Kalaghatigi V. West Patent Press Co. Ltd. AIR 1980 Kar. 92 (Full Bench)
· Tribhovandas Purshottamdas Thakkar V. Ratilal Motilal Patel, AIR 1968 SC 372
· Jayaswals NECO Ltd. V. CCE, 2006 (195) E.L.T. 142 (S.C)
· Ultratech Cement Ltd. V. CCE, Final Order passed by the Division Bench of the Tribunal at Ahmedabad vide A/10373/2019 dated 25/02/2019
· Sanghi Industries Ltd. V. CCE, Final Order passed by the Division Bench of the Tribunal at Ahmedabad vide A/10374- 10375/2019 dated 25/02/2019
· CCE V. Roofit Industries Ltd. - 2015 (319) E.L.T. 221 (SC)
· CCE V. EMCO Ltd. - 2015 (322) E.L.T. 394 (SC)
· Madras Cements Ltd. V. Addl. CCE - 2015 (40) S.T.R. 645 (Kar.)
3.1. Learned counsel also submitted that on identical issue, this Tribunal in the case of Bharat Fritz Werner Ltd. Vs. CCT, Bangalore reported in 2019 (11) TMI 1050-CESTAT Bangalore has remanded the matter back to the original authority to examine the case afresh in the light of the Board Circular dated 08/06/2018.
On the other hand, the learned AR defended the impugned order mainly on the ground that the decision of the Hon'ble Apex Court in the case of Ultratech reported in 2018 (9) G.S.T.L 337 (SC) wherein the Apex Court has held that after the amendment in the definition of 'up to the place of removal' in the year 2008, the 'place of removal' will always be factory gate and the assessee is not entitled to cenvat credit on GTA up to the buyer's premises. Learned AR fairly conceded that after the decision of the Apex Court, the Board has issued a Circular No. 1065/4/2018-CX dated 08/06/2018 and by relying upon the Board Circular, the Tribunal has remanded the case back to the original authority to examine the merits of the case afresh.
After considering the submissions of both the parties and on perusal of the material on record as well as after going through the various decisions relied upon by both the parties cited supra, I find that on an identical issue, this Tribunal in the case of Bharat Fritz Werner cited supra has remanded the case back to the original authority to pass a fresh order after examining various documents for the disputed period. It is pertinent to reproduce the said findings which is contained in para 6:
"After considering the submissions of both the parties and perusal of the material on record as well as the various judgments relied upon by both the parties cited supra, I find that after the decision of the Apex Court in the case of Ultratech, the CBEC has issued the Circular dated 08/06/2018 wherein the field formation have been given the liberty to examine each and every case on the basis of the law laid down in various cases. I also find that after the Circular issued by the Board various Benches of the Tribunal have remanded the case back to the original authority to examine the eligibility of cenvat credit of service tax on transportation of goods up to the customer's premises after the period w.e.f. 01/04/2008. By following the ratio of the said decisions, I am of the considered view that in view of the decision of the Madras High Court in the case of Bata India Limited cited supra and also in view of the Board Circular No. 1065/4/2018-CX dated 08/06/2018, the matter needs to be remanded to the original authority to verify certain factual aspects such as whether the sale is on FOR basis, whether the freight is integral part of the sale price, whether the duty paid on the value inclusive of freight amount etc. Consequently, in view of the Board Circular cited supra, the matter is remanded back to the original authority to pass a fresh order after examining the various documents for the disputed period. Accordingly, the appeal is allowed by way of remand."
Since this Tribunal has already taken a view on an identical matter in the case of Bharat Fritz Werner Ltd., by relying on the ratio of the said decision, I set aside the impugned order and remand the case back to the original authority to pass a fresh order after examining the various documents for the disputed period in the light of the Circular issued by the Board dated 08/06/2018. Appeal is accordingly disposed of by way of remand.
(Operative portion of the Order was pronounced in Open Court on 01/04/2021)