Custom, Excise & Service Tax Tribunal
Resil Chemicals Pvt. Ltd vs Commissioner Of Central Excise, ... on 16 December, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/20472/2015-SM [Arising out of Order-in-Appeal No. 744/2014 dated 21/11/2014 passed by the Commissioner of Central Excise, Bangalore-I (Appeals)] Resil Chemicals Pvt. Ltd. Plot No. 53-57, 4th Phase, KIADB Industrial Area, Jigani Link Road, Bommasandra Bangalore 560 099 Karnataka Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax Bangalore-I Post Box No. 5400, CR Buildings, Bangalore - 560 001 Karnataka Respondent(s)
Appearance:
Shri T.M. Subramanian, Advocate # A 403, Neeladri Mahal, Nandi Durg Road, Bangalore - 560 046, Karnataka For the Appellant Shri N. Jagdish, AR For the Respondent Date of Hearing: 16/12/2016 Date of Decision: 16/12/2016 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 21420 / 2016 Per: S.S GARG The present appeal is directed against the impugned order dated 21.11.2014 passed by the Commissioner (Appeals) vide which the Commissioner (Appeals) has rejected the appeal of the appellant and upheld the Order-in-Original. Briefly the facts of the case are that the appellant is engaged in the manufacture of excisable goods falling under Chapter Heading 38 & 39 of schedule to Central Excise Tariff Act, 1985 and are availing the facility of cenvat credit on only input services and capital goods. During the course of verification of records of the appellant by the Departmental Officers, it was found that the appellants have availed irregular input service tax credit on transportation service amounting to Rs. 1,06,593/- (Rupees One Lakh Six Thousand Five Hundred and Ninety Three only) for the period from March 2010 to August 2012. On these allegations, a show-cause notice dated 26.04.2013 was issued to the appellant for recovery of wrongly availed service tax credit with interest as per the provisions of Rule 14 of Cenvat Credit Rules, 2004 read with proviso to Section 11AA/11AB of the Central Excise Act and proposed penalty under Rule 15. The original authority vide its order confirmed the demand with interest and equal penalty. Aggrieved by the said order, appellant filed an appeal before the Commissioner (Appeals) who also rejected the appeal of the appellant. Hence the present appeal.
2. Heard both the parties and perused the records.
3. Learned counsel for the appellant submitted that the impugned order is not sustainable in law because the same has been passed by wrongly interpreting the definition of input service as prescribed in Rule 2(l) of Cenvat Credit Rules 2004. He further submitted that in the definition of input service the words upto the place of removal appears in the main part of the Rule under means and also in the latter part of the Rule includes. This shows that the factory gate cannot be the only place of removal. He further submitted that in the present case the assessee removed the goods for (i) exports, (ii) supply to SEZ Units (iii) Sales on FOR destination basis including freight and the freight forming an integral part of the price, paying excise duty on the price and (iv) to other consignees by paying excise duty including freight upto the point of sale of goods.
3.1. He further submitted that in the case of FOR destination sales, the place of removal is the buyers premises. He further submitted that in the case of export, the place of removal is the port and the same has been held by many decisions of the Tribunal. He further submitted that the learned Commissioner (Appeals) has wrongly denied the cenvat credit on transportation by holding that it does not fall in the definition of input service. He further submitted that the learned Commissioner (Appeals) has wrongly relied upon the decision of the Honble High Court of Calcutta in the case of Vesuvious India Ltd. 2013-TIOL-1038-HC-KOL-ST. Further in support of his submission, he relied upon the authority of the Karnataka High Court in the case of Commissioner of C. Ex. & S.T., Bengaluru-IV Vs. Ultra Tech Cement Ltd. 2016 (44) S.T.R. 227 (Kar.) and also relied upon the following decisions:
a) Ashirvad Pipes Pvt. Ltd. Vs. CCE, Bangalore-I 2012 (31) S.T.R. 693 (Tri.-Bang.)
b) Palco Metals Ltd. Vs. CCE, Ahmedabad 2012 (280) E.L.T. 299 (Tri.-Ahmd.)
c) Lumax Automotives Systems Ltd. Vs. CCE, Delhi-IV 2013 (32) S.T.R. 526 (Tri.-Del.)
4. On the other hand the learned AR submitted that this case needs to be remanded back to the original authority because the appellant has not furnished the documents showing that as per their agreement with the buyer, the goods were transported on FOR basis and there is no specific finding with regard to the same. In support of his claim, he relied upon the following authorities:
a) Lafarge India Ltd. Vs. CCE, Raipur 2014-TIOL-1720-HC-Chhattisgarh-CX
b) CCE, Kolkata-VI Vs. Vesuvious India Ltd. 2013-TIOL-1038-HC-KOL-ST
c) Ambuja Cements Ltd. Vs. Union of India 2009 (14) S.T.R. 3 (P&H)
d) CCE & ST., LTU, Bangalore Vs. ABB Ltd. 2011 (23) S.T.R. 97 (Kar.)
5. After considering the submissions of both the parties and the perusal of the record, I am of the opinion that this case needs to be remanded back for verification of the documents which are relied upon by the appellant to prove that as per the understanding of the appellant with the buyer, the goods were to be supplied at the buyers premises and the assessable value includes the transportation cost also. Therefore I set aside the impugned order and remand the case back to the original authority for verification of the documents and to pass a fresh order thereafter after affording an opportunity of hearing to the appellant and also opportunity of producing documents. With these observations, the appeal is allowed by way of remand.
(Operative portion of the Order was pronounced in Open Court on 16/12/2016) (S.S GARG) JUDICIAL MEMBER iss