Shri Khemisati Polusacks Pvt Ltd vs C.C.E. And S.T.-Daman

This appeal has been filed by Shri Khemisati Polusacks Pvt Ltd. against order demanding reversal of Cenvat Credit, interest and imposition of

penalty. The issue involved is that admissibility of Cenvat Credit on outward GTA services availed for delivery of goods from factory gate to the

buyer’s premises. Learned Counsel pointed out that they supplying goods FOR destination and therefore, in terms of Circular:1065/2018-CX.

Dated 08-June-2008 the Cenvat credit of GTA services from factory gate to buyer’s premises is admissible. He pointed out that in identical

circumstances in their own case the matter has been remanded for verification of facts Vide Order No. A/12473/2021 dated 28.10.2021.

2 Learned Authorized representative relies on the impugned order. He argued that after amendment in the definition of input service from the year

2008 credit is admissible only up to the place of removal. He also relied on the decision of Hon’ble Apex Court in the case of Ultratech Cement-

2019-TIOL-1420-CESTAT-AHM

3 I have considered the rival submissions. I find that in an identical circumstances in appellant’s own case for a different period the demand has

been set aside and matter remanded with the following observation:-

I have considered the rival submissions. I find that the issue at hand has been decided by this tribunal in the case of M/S. ULTRATECH

CEMENT (supra) wherein, para 7 following has been stated:

“7. As regard the issue raised by the appellant that the excise duty paid on the element of freight being more than the element of cenvat

credit on the outward GTA, therefore, there should not be any demand.

We find force in the argument of the appellant however, since we are deciding the issue on merit, the admissibility of the Cenvat Credit on

outward GTA on the basis of provision under Cenvat Credit Rules itself, we need not to deal this aspect hence, the issue related to this fact

left open. As regard the submission made by Ld. Counsel that they have been operating as per the guideline given in the Circular dated

22.12.2014 and 23.08.2007 which was operative at the relevant time, therefore, even though the same were withdrawn w.e.f. 08.06.2018,

but at the relevant time the benefit of said Circular shall be available. We find force in the argument of the Ld. Counsel as the law on this

issue has been settled time and again by the Hon’ble Supreme Court as per the judgment cited by the Ld. Counsel and on various other

judgments that beneficial Circular cannot be withdrawn retrospectively. Consequently, the benefit of the said Circulars shall be available to

the appellant during the material period of this case. As regard limitation, we find that the issue was not free from doubt and right from

introduction of Cenvat Scheme under Cenvat Credit Rules, the outward GTA was the matter under litigation and for that reason the

Government has to come out with clarification thereafter the matter was subject to various litigation before Tribunal, Hon’ble High

Courts and Hon’ble Supreme Court, therefore no malafide intention can be attributed to the appellant, therefore, wherever the demand

is for extended period, the same will also not be sustainable on the ground of time bar also.â€​

4.1 I find that the appellant have claimed that the facts are identical in the instant case in so far as the goods are delivered on FOR basis

and ownership of goods is transferred only on buyers premises.

4.2 Considering the assertions of the appellant and the decision of the tribunal in identical circumstances as well as the decision of

adjudicating authority in appellant’s own case for prior period, the appeal is allowed by way of remand. The adjudicating authority can

go into the facts and if it is found that the contract is of supply is on FOR basis and the ownership of the goods is transferred at the

buyer’s premises then the benefit of the credit may be allowed.

4 Relying on the aforesaid decision in the instance case also the impugned order is set aside and the matter is remanded to the original adjudicating

authority for afresh adjudication in above terms.

Appeal is allowed by way of remand.

(Dictated & Pronounced in the open court)