Custom, Excise & Service Tax Tribunal
Arising Out Of ... vs Commissioner Of Central Excise And on 28 June, 2017
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Zonal Bench O-20, New Mental Hospital Compound, Meghani Nagar, Ahmedabad 380 014 -ooOoo- Appeal No. : E/13212/2013 Arising out of OIA-RJT-EXCUS-000-APP-342-13-14 dt 13/08/2013 passed by the Commissioner of Central Excise and Service Tax (Appeals)-RAJKOT. M/s Ratnamani Metals & Tubes Ltd - Appellant(s) Vs Commissioner of Central Excise and Service Tax-RAJKOT. - Respondent(s)
Represented by For Applicant(s) : Shri Rahul Gajera, Advocate For Respondent(s) : Ms Nitina Nagori, Authorised Representative CORAM :
Dr D.M. Misra, Hon'ble Member (Judicial) Date of Hearing / Decision : 28/06/2017 ORDER No. A/11318 / 2017 Per : Dr D.M. Misra, Heard both sides.
2. This is an appeal filed against OIA-RJT-EXCUS-000-APP-342-13-14 dt 13/08/2013 passed by the Commissioner of Central Excise and Service Tax (Appeals)-RAJKOT.
3. Briefly stated the facts of the case are that the appellants are engaged in the manufacture of excisable goods viz., Pipes which they supply to M/s Coastal Gujarat Power Ltd (CGPL), Mundra, against agreement/purchase order dt. 28.10.2008. They have paid Service Tax on the handling charges of pipes on delivery of the same at the customers premises, and availed Cenvat Credit of Rs.4,62,830/- on the Service Tax paid. Alleging that the handling of pipes by the appellant being beyond the place of removal, hence, credit availed on such handling charge, is not admissible; accordingly, demand notice dt. 14.11.2011 was issued to them for recovery of the credit Rs.4,62,830/- availed during March 2009 to May 2009. On Adjudication, the demand was confirmed with interest and penalty. Aggrieved by the said order, the appellant filed an appeal before the Ld. Commissioner (Appeals), who in turn, rejected their appeal. Hence, the present appeal.
4. The Ld. Advocate, Shri Rahul Gajera, for the appellant submits that in the agreement with M/s CGPL, the appellant was required to deliver the manufactured pipes at the customers project site and cost of handling charges of such pipes was included in the price of the pipes. He submits that since the place of delivery by virtue of the said contract is at customers premises, hence, in view of the decision of this Tribunal in Unique Welding Products Pvt Ltd.s case order No A/10424-10473/2017 dt 27.2.2017, the appellants are eligible to Cenvat Credit on the Service Tax paid on handling charges at the customers premises.
5. The Ld AR for the Revenue, reiterated the findings of the Ld Commissioner (Appeals).
6. I find that the appellant had supplied pipes against the Purchase Order dtd 8.10.2009 (Annexed at Page 39 to 45) to M/s CGPL. The conditions, inter alia, are :
The price for items and quantities mentioned in this purchase order are firm and fixed for complete duration of the order. The above prices include design, engineering, manufacturing, inspection and testing at work, packing, forwarding, supply and unloading at site.
..
..
..
..
Transportation arrangement from vendors works up-to project site basis for the all items covered in the purchase order shall be made by Ratnamani Metals & Tube Ltd and charges for the same are included in order value against Sr No 4.0 of scope of supply and pricing. Service Tax on freight is included in the above order value.
7. A simple reading of the conditions mentioned in the said Agreement reveals that the appellant are required to deliver the manufactured pipes at the mega power project site of the customer M/s CGPL and the handing charges are included in the price of the said pipes. Besides, it is the appellant who is required to undertake transportation of the said huge pipes and unload it at the customers premises. Therefore, following the aforesaid judgment of this Tribunal in the case of M/s Unique Welding Products Pvt Ltd (supra), the place of delivery ought to be considered as premises of the Customer. In the said case it is observed as :
The learned Authorized Representative for the Revenue in his submission even though did not contradict the meaning of place removal explained in the said circular, however, submitted that the circular is binding on the Department and not on this Tribunal, which is free to take a contrary view. I do not find merit in the argument of the Ld. A.R in as much as in the context of allowing credit on outward freight (GTA service) the approach of the Board has been consistent all along even though the definition of place of removal borrowed from the Section 4 of CEA, 1944 and later inserted in the CENVAT Credit Rules 2004 w.e.f 11.07.2014. Also, even after the delivery of the judgment in Ispat Industries case, explaining the definition of place of removal in the context of Section 4 of Central Excise Act, 1944, the Board has not issued any further circular, restricting the meaning of place of removal in the light of the observations of the Hon'ble Supreme Court. Therefore, the CENVAT Credit of Service Tax paid on outward freight (GTA service) is admissible when the condition of sale of goods puts burden on the manufacturer to deliver the goods at the buyers premises. This Tribunal has come to the same conclusion in Forace Polymers Pvt. Ltd and Birla Corporation Ltds case(supra). Further, I do not find merit in the contention that inclusion of element of freight in the assessable value or otherwise in any manner be a relevant factor for considering the eligibility of Cenvat Credit on outward freight (GTA service) for transporting the goods by the manufacturer from the factory to the premises of the buyer in view of the judgment of the Honble Supreme Court in the case of Maruti Suzuki Ltd. Vs. C.C.E., Delhi III, 2009 (240) ELT 641 (SC) and the decision of the Honble Bombay High Court in the case of C.C.E., Nagpur vs. Ultratech Cement Ltd. 2010 (20) STR 5(Bom.).
8. In view of the above, the appellants are thus eligible to Cenvat Credit of the Service Tax paid on handling charges at the premises of the customer which was denied to them considering the place of removal as the factory gate. In the result, the impugned order is set aside and the appeal is allowed with consequential relief, if any, as per law.
(Dictated and pronounced in the open Court) (D.M. Misra) Member (Judicial) swami 4