Custom, Excise & Service Tax Tribunal
Pune-I vs Bilcare Ltd on 13 June, 2018
IN THE CUSTOMS, EXCISE AND SERVECE TAX APPELLATE
TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT NO. I
APPEAL NO. E/85705/2018
(Arising out of Order-in-Appeal No. PUN-EXCUS-001-APP-0764/2017-
18 dated 30.11.2017 passed by the Commissioner of Central Tax
(Appeals-I), Pune.)
CCE & ST, Pune-I Appellant
Vs.
M/s Bilcare Ltd. Respondent
Appearance:
Shri M.R. Melvin, Superintendent (AR) for Appellant Shri S.S. Gupta, C.A. for Respondent CORAM:
HON'BLE SHRI S K MOHANTY, MEMBER (JUDICIAL) Date of Hearing: 13.06.2018 Date of Decision: 13.06.2018 ORDER NO. A/86731 / 2018 Per: S K Mohanty Revenue has filed this appeal against the impugned order dated 30.11.2017, passed by the learned Commissioner of Central Tax (Appeals-I), Pune.
2. Brief facts of the case are that the respondent herein, is a manufacturer of excisable goods namely, PVC Films, PVDC Coating Films and Aluminum Foils, classifiable under Chapter 39 & 76 of the E/85705/2018 2 Central Excise Tariff Act, 1985. The respondent avails CENVAT credit of Central Excise paid on the inputs, capital goods and Service Tax on input services. During the disputed period i.e. June 2015 to December 2016, the respondent had availed CENVAT credit of Service Tax paid by it on GTA service, under reverse charge mechanism. Taking of such credit was disputed by the Department on the ground that the definition of input service contained in Rule 2(l) of the CENVAT Credit Rules, 2004 permits a manufacturer to avail Cenvat credit of service tax paid on transportation of goods up to the place of removal and not beyond. In other words, the Department contended that since the place of removal, in the case of respondent, is the factory gate, transportation of goods for delivery at the buyer's premises should not be considered as input service for the benefit of Cenvat credit. Accordingly, the Department initiated show-cause proceedings against the respondent and confirmed the CENVAT demand. On appeal, the learned Commissioner (Appeals) vide the impugned order dated 30.11.2017 has set aside the adjudged demand confirmed against the respondent, holding that since the sale took place at the buyers premises, the respondent should be eligible for the CENVAT credit in respect of Service Tax paid on transportation of goods. Being aggrieved with the impugned order, Revenue has filed the present appeal before the Tribunal. It has been contended by Revenue that since place of removal in the case of respondent, is the factory gate, any expenses incurred thereafter for transportation of goods for delivery at the buyer's premises should not fall within the purview of input service and accordingly, the respondent should not E/85705/2018 3 be eligible for the CENVAT credit in respect of service tax paid on GTA service.
5. Heard both sides and perused the records.
6. So far as eligibility of CENVAT credit on transportation of goods for delivery at the buyer's premises is concerned, the issue is no more res integra, in view of the judgment of Hon'ble Supreme Court in the case of Commissioner of Central Excise and Service Tax Vs. Ultratech Cement Ltd., reported in 2018 (2) TMI 117 (SC). In the said judgment, the Hon'ble Apex Court have ruled that after the amendment of the definition of input service w.e.f. 01.03.2008, services used/utilised for transportation of goods "up to the place of removal", should be treated as input service. In this case, it is an admitted fact on record that the goods were removed from the factory of the respondent for onward sale to its buyers. Thus, the place of removal should be considered at the "factory gate" and not the "premises of the buyer". Therefore, in my considered view, the respondent should not be eligible for the CENVAT benefit in respect of Service Tax paid by it under Reverse Charge Mechanism, as recipient of GTA service, for transportation of goods, for delivery at the buyer's premises.
E/85705/2018 4
7. In view of the above, I do not find any merits in the impugned order, so far as it allowed the CENVAT benefit on GTA service to the respondent. However, considering the fact that the issue involved in the present case was highly contentious and was finally resolved as per the judgement of Hon'ble Supreme Court, in the case of Ultratech Cement Ltd. (supra), I am of the view that penalty cannot be imposed on the appellant, as prayed for by Revenue in the grounds of appeal. Accordingly, Revenue's appeal is allowed to the extent of denial of CENVAT benefit on the GTA service availed by the respondent.
(Dictated and pronounced in open Court) (S K Mohanty) Member (Judicial) Prasad