Custom, Excise & Service Tax Tribunal
B &Amp; B Safety Systems India Ltd vs Commissioner Of Gst&Amp;Cce (Chennai ... on 13 March, 2019
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
Appeal Nos. E/42256 to 42258/2018
(Arising out of Order-in-Appeal No. 73, 74 & 75/2018 (UN)(CS)
dated 30.5.2018 passed by the Commissioner of GST & Central
Excise (Appeals), Puducherry)
M/s. B & B Safety Systems (I) Ltd. Appellant
Vs.
Commissioner of GST & Central Excise
Chennai South Respondent
Appearance Shri V.S. Manoj, Advocate for the Appellant Shri L. Nandakumar, AC (AR) for the Respondent CORAM Hon'ble Ms. Sulekha Beevi C.S., Member (Judicial) Date of Hearing / Decision: 13.03.2019 Final Order Nos. 40472-40474 / 2019 Brief facts are that the appellants are engaged in manufacture of rupture disk and are registered with the Central Excise Department. They are availing the facility of CENVAT credit scheme. On verification of records, it was noticed that the appellant had availed wrong credit on certain input services. Show Cause Notice was issued proposing to recover wrongly availed credit along with interest and also for imposing penalty. After due process of law, the original authority confirmed the 2 demand, interest and imposed penalty. In appeal, Commissioner (Appeals) allowed the credit with regard to certain services but disallowed credit in respect of GTA Service for transportation of goods upto to buyer's premises, Works Contract Service and also for printing charges. Aggrieved by the disallowance of credit on these input services, appellant is now before the Tribunal.
2. The ld. counsel Shri V.S. Manoj appeared on behalf of the appellant and submitted that the appellant has sold to the customers on FOR basis. Therefore, the place of removal is the buyer's premises. The department has considered that the appellant is not eligible for the credit of the service tax paid on the freight for outward transportation of goods upto the buyer's premises. He submitted that though the Hon'ble Supreme court had rendered in Commissioner of Central Excise Vs. Ultra Tech Cement Ltd. - 2018 (9) GSTL 337 (SC0 that the credit on GTA service upto the buyer's premises is not eligible, thereafter Circular F. No. 116/23/2018-CX3 dated 8.6.2018 has been issued by the Board clarifying the place of removal in the case where the sale takes at buyer's premises. In the present case, the place of removal is the buyer's premises, this aspect has not been considered by the authorities below. He therefore requested to remand the matter to the adjudicating authority for reconsideration on the basis of the circular issued by the Board.
32.1 The second issue is with regard to the disallowance of credit on works contract service availed by the appellant. He submitted that the department has disallowed the credit alleging that such service is not eligible input service. The period involved is prior to 1.4.2011. The invoices itself would show that it is dated 18.2.2011. Therefore, the works contract service for construction of building, civil structure or part thereof was excluded from the definition of input service only with effect from 1.4.2011. The period involved being prior to 1.4.2011, the appellant is eligible for credit.
2.2 The third issue is with regard to disallowance of credit on printing charges for an amount of Rs.166/-. The ld. counsel submitted that the appellant is not pressing this issue.
3. The ld. AR Shri L. Nandakumar supported the findings in the impugned order. With respect to GTA service, he submitted that the appellant has to produce documents to prove that the place of removal is the buyer's premises.
4. Heard both sides.
5. The first issue is with regard to disallowance of credit on GTA service. The Hon'ble Supreme Court in the case of Ultra Tech Cement Ltd. (supra) has held that credit is eligible from the place of removal upto the buyer's premises. However, in the case of Roofit Industries Ltd. reported in 2015 (319) ELT 221 (SC), the Hon'ble Apex Court has held that when the sale is on FOR basis, all the charges / cost have to be included in the 4 assessable value for the payment of central excise duty. Thus, in such cases, when the sale takes at buyer's premises, the place of removal is the buyer's premises. The Board has clarified in their circular dated 8.6.2018 that when the transaction / sale is on FOR basis, the place of removal would be the buyer's premises. Therefore, it is necessary to determine the place of removal to consider the eligibility of credit of service tax paid on freight charges upto the buyer's premises. For this purpose, I deem it fit to remand the matter to the adjudicating authority who shall look into the issue of eligibility of credit on GTA service after determining the place of removal. In doing so, the adjudicating authority shall take into consideration the circular issued by the Board as well as the decision of this Tribunal vide Final Order No. A/10373/2019 dated 25.2.2019 in the case of Ultra Tech Cement Ltd. Vs. Commissioner of Central Excise. The appeal with regard to this issue is remanded. 5.1 The second issue is with regard to the credit disallowed on works contract service. The mere allegation in the Show Cause Notice is that the input service is not eligible for credit. The period involved is prior to 1.4.2011. The invoice produced by the ld. Counsel also shows that the period is prior to 1.4.2011. The input services for setting up of factory / premises is eligible during the period prior to 14..2011. Therefore, the disallowance of credit on the works contract service is unjustified and requires to be set aside, which I hereby do.
55.2 The credit in respect of printing charges is upheld as the appellant is not pressing the same.
6. From the foregoing discussions, the issue with regard to GTA service is remanded to the adjudicating authority for fresh consideration. The issue with regard to works contract service is allowed in favour of the appellant. The third issue is upheld. However, the penalty imposed in the third issue is set aside. The appeals are disposed in the above terms.
(Dictated and pronounced in open court) (Sulekha Beevi C.S.) Member (Judicial) Rex