Custom, Excise & Service Tax Tribunal
Sports & Leisure Apparels Ltd vs Ce & Cgst Noida on 21 November, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.I
Excise Appeal No.52592 of 2014
(Arising out of Order-in-Original No.47/COMMISSIONER/NOIDA/2013-14
dated 31.01.2014 passed by Commissioner Customs, Central Excise & Service
Tax, Noida)
M/s Sports & Leisure Apparels Ltd., .....Appellant
(B-207A, Phase-II, Noida-201305 U.P.)
VERSUS
Commissioner of Customs, Central Excise &
Service Tax, Noida ....Respondent
(C-56/42, Sector-62, Noida-201307 U.P.) APPEARANCE:
Shri Atul Gupta, Advocate for the Appellant Shri Santosh Kumar, Authorized Representative for the Respondent CORAM: HON'BLE MR. P.K. CHOUDHARY, MEMBER (JUDICIAL) HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) FINAL ORDER NO.-70748/2024 DATE OF HEARING : 30 January, 2024 DATE OF DECISION : 21 November, 2024 P. K. CHOUDHARY:
The present appeal has been filed by the Appellant assailing the Order-in-Original No.47/Commissioner/Noida/2013- 14 dated 31.01.2014 passed by the Commissioner of Customs, Central Excise & Service Tax, Noida.
2. The facts of the case in brief are that the Appellant is an Apparel Company and engaged in the manufacture of Branded Knitted Readymade Garments and Branded Woven Readymade Garments under the brand name of Lacoste. Till 01.03.2011, readymade garments were exempt from payment of duty and hence the Appellant was not availing any credit. Subsequently vide Notification No.12/2011-C.E. dated 01.03.2011, all goods bearing brand names and falling under Chapter 61, 62, and 63 (except falling under CETSH 63090000 and 6310) were made 2 Excise Appeal No.52592 of 2014 leviable to Central Excise duty and the Central Excise duty was paid on MRP under Section 4A. Therefore, w.e.f. March, 2011, the Appellant commenced dispatching finished branded readymade garments from the factory on payment of Central Excise duty on MRP after reducing the admissible abatement, in terms of Notification No.20/2001-CE(NT) dated 30.04.2001, as amended. From the warehouse, some quantity of goods is sold to the franchisees and the remaining quantity of manufactured goods is stock transferred to the retail outlets of the Appellant, from where the goods are sold to the customers. The Appellant availed services of credit card, internet charges, professional service, rent, security guard charges, store maintenance & cleaning charges, telephone charges, online maintenance charges, outward freight, membership fee and sale commission.
3. In addition to the readymade garments, other items footwears, leather bags & belts, caps, perfumes, sunglasses, artificial jewellery etc. purchased by the Appellant from various sources and also traded from the retails outlets. The Appellant availed Goods Transport Services for transportation of the finished goods cleared by them from their factory to the warehouse and from warehouse to the retail outlets. The point of dispute is as to whether the GTA Service availed for transportation of the goods from the factory to the warehouse/retails outlets and various services at the retail outlets would be eligible for Cenvat credit. In this regard, as mentioned in para 3 of the Show Cause Notice1, the Appellant have already reversed proportionate Cenvat credit in respect of the input services in proportion to turnover of their trading activities. The dispute is only in respect of the input services which were availed for transportation of the goods from the factory to the warehouse and from the warehouse to the retail outlets various other services as mentioned in the SCN availed at the retail outlets which were not attributable to the trading activities. The Commissioner by the impugned Order-in-Original 1 SCN 3 Excise Appeal No.52592 of 2014 holding that the Appellant would not be eligible for Cenvat credit in respect of these services, confirmed Cenvat credit demand of Rs.84,83,970/- under Rule 14 of the Cenvat Credit Rules, 20042 alongwith applicable interest and imposed penalty of equal amount under Rule 15 (1) of CCR, 2004. The Commissioner in this regard held that the Appellant would be eligible for Cenvat credit only in respect of the services availed upto the „place of removal‟ and it is the factory which is the „place of removal‟. Besides this, he also observed that the various services availed at the retail outlets have no nexus with the manufacturing activities.
4. Being aggrieved with aforesaid order the Appellant has filed the present appeal before the Tribunal.
5. The period in dispute in the present appeal is from April, 2012 to December, 2012. Learned Advocate appearing on behalf of the Appellant submits that the entire emphasis of the Adjudicating Authority is only on one point that since the duty is paid at the time of clearance of the goods, therefore, same will be the „place of removal‟ under Section 4 of the Central Excise Act, 19943 and submitted that the issue is no more res integra and is covered by the decision of the Tribunal in their own case in Excise Appeal No.58302/2013-EX(DB) Final Order No.70068/2016 dated 20.01.2016 period involved from April, 2011 to March, 2012 and also Final Order No.71079/2017-(SM) dated 05.09.2017 period involved from January, 2013 to February, 2013.
6. Heard both sides and perused the appeal records.
7. We find that the issue involved in the above mentioned appeals was the same as in the present proceedings i.e., whether the Appellant will be eligible to avail Cenvat credit of services at their retail outlets from where sales are affected. We find that the Tribunal in Order dated 20.01.2016 relied on L.G. Electronics (India) Pvt. Ltd. vs. CCE, Noida 2010 (19) S.T.R. 340 (Tri.-Del.) wherein it has been held that if deliveries are on 2 CCR, 2004 3 The Act 4 Excise Appeal No.52592 of 2014 F.O.R. destination basis then the point of sale will be treated as the „place of removal‟ and Cenvat credit upto that place would be admissible. Further the Tribunal in the Appellant‟s own case held that it is a settled proposition of law, and the Appellant there has correctly availed Cenvat credit on input services availed at the retail outlets which will be the „place of removal‟. It is submitted that the ratio of the aforesaid judgement in the case of Metro Shoes Pvt. Ltd. vs. CCE, 2008 (10) S.T.R. 382 squarely applies to the present case. In the present case, the Appellant cleared the garments from the factory on payment of duty to their warehouse, from where the goods were transferred to their outlets for sale to the customers. As no sale took place either at the factory gate or the warehouse (except a few instances where goods were sold to the franchisees), the place of removal shall be the retail outlets. The retail outlets being the place of removal, the service tax paid on all the services taken and utilize, till the sale of the goods from the retail outlets shall be available to the Appellant. The decision in the case of MSPL was also affirmed by the Hon‟ble Bombay High Court which is reported as 2012 (28) S.T.R. J19 (Bom.-HC.).
8. In view of the above discussions, we find that the facts of the present case are squarely covered by the aforesaid decision of the Tribunal in the Appellant‟s own case and accordingly the impugned order cannot be sustained and the same is set aside. The appeal filed by the Appellant is allowed with consequential relief, as per law.
(Order pronounced in open court on..........................................................................) SD/-
(P. K. CHOUDHARY) MEMBER (JUDICIAL) Separate Order (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) LKS 5 Excise Appeal No.52592 of 2014 SANJIV SRIVASTAVA:
I have gone through the order prepared by the Learned Brother but am not in position to persuade myself to agree with the same.
2. Facts are recorded in the order prepared by learned brother and am not reproducing the same again for sake of brevity. Undisputedly the goods in the present case are goods notified under Section 4A of the Central Excise Act, 1944 and are liable to pay Central Excise Duty on the value determined in terms of that Section (i.e. Retail Sale Price - Abatement Provided by the Notification issued in this regards). Undisputedly appellant is discharging the duty accordingly.
3. For ease of reference Section 4A of the Central Excise Act, 1944 is reproduced below:
4A. Valuation of excisable goods with reference to retail sale price.-- (1) The Central Government may, by notification in the Official Gazette, specify any goods, in relation to which it is required, under the provisions of the Legal Metrology Act, 2009 (1 of 2010) or the rules made thereunder or under any other law for the time being in force, to declare on the package thereof the retail sale price of such goods, to which the provisions of sub-section (2) shall apply.
(2) Where the goods specified under sub-section (1) are excisable goods and are chargeable to duty of excise with reference to value, then, notwithstanding anything contained in Section 4, such value shall be deemed to be the retail sale price declared on such goods less such amount of abatement, if any, from such retail sale price as the Central Government may allow by notification in the Official Gazette.
(3) The Central Government may, for the purpose of allowing any abatement under sub-section (2), take into 6 Excise Appeal No.52592 of 2014 account the amount of duty of excise, sales tax and other taxes, if any, payable on such goods.
(4) Where any goods specified under sub-section (1) are excisable goods and the manufacturer--
(a) removes such goods from the place of manufacture, without declaring the retail sale price of such goods on the packages or declares a retail sale price which is not the retail sale price as required to be declared under the provisions of the Act, rules or other law as referred to in sub- section (1); or
(b) tampers with, obliterates or alters the retail sale price declared on the package of such goods after their removal from the place of manufacture, then, such goods shall be liable to confiscation and the retail sale price of such goods shall be ascertained in the prescribed manner and such price shall be deemed to be the retail sale price for the purposes of this section.
Explanation 1.--For the purposes of this section, "retail sale price" means the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer and includes all taxes local or otherwise, freight, transport charges, commission payable to dealers, and all charges towards advertisement, delivery, packing, forwarding and the like, as the case may be, and the price is the sole consideration for such sale:
Provided that in case the provisions of the Act, rules or other law as referred to in sub-section (1) require to declare on the package, the retail sale price excluding any taxes, local or otherwise, the retail sale price shall be construed accordingly.
Explanation 2.-- For the purposes of this section,--7 Excise Appeal No.52592 of 2014
(a) where on the package of any excisable goods more than one retail sale price is declared, the maximum of such retail sale price shall be deemed to be the retail sale price;
(b) where the retail sale price, declared on packages of any excisable goods at the time of its clearance from the place of manufacture, is altered to increase the retail sale price, such altered retail sale price shall be deemed to be the retail sale price;
(c) where different retail sale prices are declared on different packages for the sale of any excisable goods in packaged form in different areas, each such retail sale price shall be the retail sale price for the purposes of valuation of the excisable goods intended to be sold in the area to which the retail sale price relates.
4. By the plain reading of the above section it is quite evident that there is no concept of "place of removal" in this section. It seems that the concept of place of removal has been borrowed from the Section 4 of the Central Excise Act, 1944. Place of removal has been defined in Section 4 as follows:
(c) "place of removal" means--
(i) a factory or any other place or premises of production or manufacture of the excisable goods;
(ii) a warehouse or any other place or premises
wherein the excisable goods have been
permitted to be deposited without payment of duty;
(iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory, from where such goods are removed;8 Excise Appeal No.52592 of 2014
5. It is evident from Section 4A that the value determined in terms of the said Section is at the place of manufacture and sub section (2) specifically excludes all the provisions of the section 4 by the use of Non Obstante Clause "Notwithstanding anything contained in section 4 ...". If for purpose of determination of value of the goods for payment of duty the provisions of Section 4, including the concept of place of removal as per that section has been specifically excluded for the goods in respect of which section 4A applies the same could not have been imported for these goods for determining admissibility to CENVAT Credit in terms of Rule 2 (l) of CENVAT Credit Rules, 2004.
6. In para 7 learned brother has placed sole reliance on the decision of tribunal in case of L G Electronic [2010 (19) STR 340 (T-Del)]. The said decision of tribunal was considered by Hon‟ble Allahabad High Court as reported at 2016 (44) STR 249 (ALL) and following was observed:
"2. This appeal was admitted on 25-10-2010 on the following substantial question of law :
"Whether or not the GTA outward services is within the ambit of „input service‟ as per definition under 2(I)(ii) of Cenvat Credit Rules, 2004? The credit availed on the service tax paid on outward transportation beyond the place of removal appeared to be in-admissible to them as the services provided cannot be treated as „input service‟ in terms of Cenvat Credit Rules, 2004?"
3. Tribunal while interpreting definition of „input service‟ has noticed contention of assessee that sales of finished goods to their customers/dealers are on FOR destination basis and transport and transit insurance is arranged by assessee. The cost of transportation on FOR basis is integral part of price charged from customer and risk of damage to the goods or loss of goods during transit is of assessee. Tribunal has opined that if this claim set up by assessee is correct, claim of assessee of transportation of 9 Excise Appeal No.52592 of 2014 goods up to the place of consumer, either from Factory or from Depot, may be covered by definition of „input service‟ and for that purpose it has remanded the matter by means of impugned judgment dated 12-4-2010 [2010 (19) S.T.R. 340 (Tribunal)].
4. In fact the question, whether price of goods is on FOR basis or not is an important aspect necessary to decide the question whether it can be included within „input service‟ or not and since for determination thereof, matter has been remanded, therefore, in our view, it would not be appropriate at this stage to answer the substantial question of law formulated above and instead let the matter be decided by competent authority as per remand order passed by Tribunal after recording factual findings and, therefore, we leave this question open. Appellant may raise this question after matter is decided by competent authority pursuant to impugned order passed by Tribunal remanding the matter."
7. This decision in the case of L G Electronics has been departed from by Delhi bench in case of Ultratech Cement Ltd [2014 (35) S.T.R. 751 (T - Del)] holding as follows:
"9. Demand for period with effect from 1-4-2008.
9.1 For this period, there is no dispute that on account of amendment to Rule (l) of Cenvat Credit Rules, 2004, the Cenvat Credit of Service Tax paid on the GTA Service availed for transportation of finished goods only up to place of removal is admissible. However on this point the Appellant‟s plea is that all their sales were on FOR destination basis satisfying the criteria prescribed in this regard in the Board‟s Circular No. 97/6/2007-S.T., dated 23-8-2007, inasmuch as during transit, the risk of loss of goods or damage to the goods was of the Appellant and the freight charges up to the customers‟ premises were part of the transaction value and hence in accordance with the above mentioned Circular of the Board, it is the customers‟ premises which would be the „place 10 Excise Appeal No.52592 of 2014 of removal‟. The Department, however, disputes this claim of Appellant and it has been pleaded that the Appellant‟s sales were not on FOR destination basis, as the criteria prescribed in this regard in the Board‟s Circular dated 23-8-2007 is not satisfied. It is also pleaded on behalf of the Department that since the duty on cement during entire period of dispute was not on ad valorem basis but at specific rate, the definition of place of removal‟ as given in Rule 4(3)(c) of the Central Excise Act, 1944 would not be applicable and as such it is the „factory gate‟ which would be the „place of removal‟ and in this regard the learned DR relies upon the Tribunal judgment in case of Lafarge India Pvt. Ltd., reported in 2012 (285) E.L.T. 390. The learned counsel Sh. B.L. Narsimhan for the Appellant, however, relies upon the Tribunal‟s judgment in case of LG Electronics Ltd., reported in 2010 (19) S.T.R. 340 wherein relying upon the Board‟s Circular No. 137/3/2006-EX-4, dated 2-2-2006 it was held that Cenvat Credit of Service Tax paid on outward transportation of finished goods up to the customers‟ premises would be admissible if the sales are on FOR destination basis, even if the duty on the finished goods is payable at specific rate on or the value determine under section 4A of the Central Excise Act.
9.2 With regard to the Cenvat credit demand for the period from 1-4-2008, in all the three appeals, we have considered the submissions from the sides and perused the records. For this period, there is no dispute that the definition of‟ input service‟ as given in Rule (l) covered GTA Service availed for transportation of finished goods only up to the „place of removal‟. The main point of dispute for this period is as to what is the „place of removal‟, whether the factory gate or depot/dump or customers‟ premises.
9.3 In terms of the Board‟s Circular No. 97/8/2007-S.T., dated 23-8-2007 since the „place of removal‟ is not defined in the Cenvat Credit Rules, 2004, in terms of the Provisions of 2(t) of these Rules, this expression shall have meaning 11 Excise Appeal No.52592 of 2014 assigned to it in Central Excise Act, 1994 and since Section 4(3)(c) of Central Excise Act defines „place of removal‟, this definition of „place of removal‟ shall be adopted for Cenvat Credit Rules and accordingly in the cases where the sales are on FOR destination basis and the transfer of ownership takes place at the customers‟ premises, it is the customers‟ premises which would be the place of removal and as such the Cenvat Credit of service tax paid on GTA Service availed for transportation of finished goods from the factory gate/depot to the customers‟ premises would be admissible. In the Board Circular No. 137/3/2006-EX-4, dated 2-2-2006 it has been clarified that in cases where the goods after removal from the factory to the depot are sold from the depot, it is the depot which would be the place of removal and Cenvat Credit of service tax paid on transportation of finished goods up to such depot would be admissible, irrespective of whether the duty on the finished goods is chargeable at specific rate or at ad valorem rate or on value determined under section 4A. It is only on the basis of this Circular that the Tribunal in case of LG Electronics Ltd., reported in 2010 (19) S.T.R. 340 (Tri.- Del.) had held that the Cenvat credit of Service Tax paid on GTA Service availed for transportation of finished goods from the factory gate to customers‟ premises would be admissible when sales are on FOR destination basis irrespective of whether the duty on the finished goods was paid on the value determine under section 4A and not on the value determined under Section 4. However learned DR points out that this view is not correct as the definition of "place of removal" in Section 4(3)(c) of the Central Excise Act, as is clear from the opening words of the sub-section(3) "for purpose of this section" is for the purpose of this section only and this section i.e. Section 4, is applicable only when duty on any excisable goods is chargeable with reference to their value and goods are not covered by the provisions of Section 3(2) or section 4A and the assessable value is required to be determined under Section 4. It has, therefore, been pleaded that since the duty 12 Excise Appeal No.52592 of 2014 on cement is at specific rate, the definition of „place of removal‟ as given in Section 4(3)(c) would not be applicable and as such the place of removal will be the factory gate i.e. place on removal from where the duty payable is payable.
9.4 According to Section 2(l) of Cenvat Credit Rules, 2004 "words and expression used in these Rules and not defined, but defined in the Excise Act or the Finance Act shall have meanings respectively assigned to them in these Acts". There is no definition of „place of removal‟ in Finance Act, 1994. However this expression is defined in sub-section (3) of sub- section 4 of the Central Excise Act, 1944. But the opening words of sub-section (3) of section 4 are "for the purpose of this section" which shows that the definition of various terms given in this sub-section is only for the purpose of this section. As is clear from the provisions of Section 3(2) read with sub- section (2) of Section (4) of Central Excise Act, 1944 and Section 4A ibid., the provisions of the section 4 are applicable only when duty on any goods is chargeable with reference to their value, and but neither the goods are notified for determination of their assessable on the basis of their MRP under section 4A nor any tariff value has been fixed by the Government in respect of these goods under Section 3(2). The question arises as to whether the definition of „place of removal‟ in Section 4(3)(c) which is for the purpose of this section, can be adopted for the purpose of Cenvat Credit Rules, 2004 by invoking Rules2(t) of these Rules.
9.5 In our view this is a case of legislation by reference and not a case of legislation by incorporation, as Rule 2(t) simply refers to "Excise Act" or "Finance Act" without mentioning which Excise Act or which Finance Act. This would have been a case of legislation by incorporation if the provision of Rule 2(t) of Cenvat Credit Rules, 2004 had been that „place of removal‟ shall have the same definition that as given in section 4(3)(c) of the Central Excise Act, 1944, which is not the case. There is difference between adoption of a particular provision of an 13 Excise Appeal No.52592 of 2014 earlier statute in a later statute by incorporation and by reference. The incorporation means as if the provision of the earlier Act which has been incorporated into a later Act, has been written in a pen and ink or printed into that Act. The incorporated provision become part of the later statute in which it has been incorporated. In the case of legislation by incorporation, unless the later Act and the earlier Act are supplemental to each other or are in pari materia, the provision incorporated in later statute remains unaffected by repeal or amendment of the parent statute from which the same had been adopted by incorporation, while in the case of legislation by reference, it is not so. In case of legislation by incorporation, when a particular provision of an earlier statute „A‟ has been incorporated in a later statute „B‟, the scope of the incorporated provision in statute „B‟ would be unaffected by some other provision in the parent statute „A‟ which had restrictive effect in that Act on the operation of the incorporated provision and that provision is not allowed to be read while construing the incorporated provision in the later Act. Apex Court in case of Onkarlal Nandlal v. State of Rajasthan reported in 1986 AIR SC 2146 has held that when only sub-section (2) of a Section of the earlier Act was incorporated in the later Act, the sub-section (1) of the parent Act‟ which had a restrictive effect on the operation of sub- section (2) in the parent Act, cannot be allowed to be read for the purpose of construing Sub-section(2) as incorporated in the later Act. But in case of legislation by reference, where a statute only refers to some provision of an earlier statute and the referred provision has not been incorporated and has not become part of the later statute, the provision of the earlier statute, as referred to in the later statute, has to be construed by reading it in the context of and along with the other provisions of the parent statute, even if those provisions have not been referred to in the later statute. In case of Tata Tea Ltd. v. State of Bombay reported in AIR 1988 SC 1435, the Apex Court, while construing the term "Agricultural Income" in 14 Excise Appeal No.52592 of 2014 Art 366(1) of the Constitution of India which defines this term as "Agricultural Income‟ as defined for the purpose of enactments relating to Indian Income Tax", has held that the meaning of this term has to be considered not merely by looking to the Income Tax Act, 1922 or Income Tax Act, 1961 but also with reference to the rules made under these Acts for computation of Income when the same is derived in part from agriculture and in part from business and on this basis held that only 60% of the income from the sale of tea grown and manufactured by an assessee, as provided on Income Tax Rules can be held to be agricultural income which the states can tax. The ratio of this judgment of the Apex Court is squarely applicable to this case.
9.5.1 Applying the above principle, the scope of definition of „place of removal‟ as given in Clause (c) of Section 4(3) of Central Excise Act, 1944, when adopted in Cenvat Credit Rules, 2004, would not have been restricted by the other provisions of section 4, if the definition of „place of removal‟ in Section 4(3)(c) of the Central Excise Act, 1944 had been adopted in Cenvat Credit Rules, 2004 by incorporation, but since this is a case of legislation by reference, the meaning of the „place of removal‟ as given in Section 4(3)(c) of the Central Excise Act, 1944, would have to be determined, keeping in view the other provisions of this section, from which it is clear that the definition of various terms including „place of removal‟ given in Section 4(3) are "for the purpose of this section" only, which is applicable only when the rate of duty chargeable on the excisable goods is with reference to their value and neither the tariff value have been fixed by the Government under Section 3(2) for those goods, nor those goods have been notified for determining value on the basis of their MRP under section 4A. Therefore, when the duty on the finished goods is chargeable at ad valorem rate on value determined under Section 4, only then the definition of „place of removal‟ as given in Section 4(3)(c) can be adopted for the purpose of Cenvat Credit Rules, 2004 and in other cases the 15 Excise Appeal No.52592 of 2014 natural meaning of the expression „place on removal‟ i.e. the place on removal from which the duty on the goods is liable to be paid i.e. the factory gate or Bonded Warehouse, which would have to be adopted. In fact Hon‟ble Karnataka High Court in case of ABB Ltd., (supra) in Paras 15 & 16 of the judgment has observed that though the expression „place of removal‟ is defined under Section 4(3) of the Central Excise Act, its applicability is confined as is clear from the opening words of sub-section (3) "for the purpose of Section 4" only.
9.6 This issue can also be looked at from another angle. The „place of removal‟ as defined in Section 4(3) extends the scope of this term to depot or consignment agent‟s premises or any other place or premises from where the excisable goods are sold after their clearance from the factory. Thus if goods after being cleared from the factory are sold from the depot, the depot, would be the „place of removal‟ or if after clearance from factory are sold from the consignment agent‟s premises, then the consignment agent‟s premises would be the „place of removal‟ and if after clearance from the factory are sold from any other premises, that premises would be the „place of removal‟. However in these cases the „time of removal‟, as per the definition of this expression given in Section 4(3)(cc), is deemed to be the time at such goods are cleared from the factory and accordingly, though „place of removal‟ is depot or consignment agent premises or customers‟ premises depending upon from where the sale takes place, the „time of removal‟ is deemed to be the time at which the goods leave the factory and the duty liability is required to be discharged only at that time i.e. at the time of removal from the factory. The natural definition of the expression the „place of removal‟ in respect of any goods would be the location of the goods at the time of removal i.e. at the time when the goods leave the factory or Bonded Warehouse which is the time when duty is required to be paid. Thus the „place of removal‟ as defined in Section 4(3)(c), read with Section 4(3)(cc) ibid, is a legal fiction. It is settled law that legal fiction is to be applied only 16 Excise Appeal No.52592 of 2014 for the purpose for which it has been created and not for any other purpose. Therefore, when the „place of removal‟ has been defined under Section 4(3)(c) for the purpose of determining value under section 4, in our view the definition of „place of removal‟ , cannot be adopted for Cenvat Credit Rules, 2004 when the duty on the finished goods is at specific rate or is chargeable at ad-valorem rate on the tariff value fixed under Section 3(2) or on value determined under Section 4A in which cases the definition of „place of removal‟ in Section 4(3)(c) is not relevant.
9.6.1 Moreover, the Cenvat Credit Rules have been framed by the Central Government under Section 37(1) of the Central Excise Act, 1944 under delegated legislative powers. The provisions of Cenvat Credit Rules, 2004, therefore, have to be deemed to be in accordance with the provisions of Central Excise Act, 1944, not in conflict with the provisions of the Act. Therefore, when Section 4(3) restricts the scope of the terms defined in this section only for the purpose of Section 4, by invoking Rule 2(t) of Cenvat Credit Rules, 2004, the definition of „place of removal‟ in Section 4(3)(c) cannot be applied to cases when the rate of duty on the final product is at specific rate or if it is at ad valorem rate, the value is determined under Section 3(2) or Section 4A and as such, the definition of „place of removal‟ in Section 4(3)(c) is irrelevant. The interpretation of Rule 2(t) of the Cenvat Credit Rules, 2004, which is in conflict with the provisions of Central Excise Act, 1944, has to be avoided.
9.7 We, therefore, hold that for the period w.e.f. 1-4-2008, while Cenvat Credit of service tax paid on the GTA Service availed for transportation of the finished goods up to the „place of removal‟ would be admissible, the definition of „place of removal‟, as given in Section 4(3)(c) would be applicable only in the cases where the rate of duty on the finished goods is chargeable at ad valorem rate on the value determined 17 Excise Appeal No.52592 of 2014 under Section 4 and in other cases the „place of removal‟] would be the factory gate.
10. A consequence of applying the definition of „place of removal‟ as given in Section 4(3)(c) of the Central Excise Act, 1944 to Cenvat Credit Rules, 2004 even in the cases where the duty on the final product is levied at specific rate or at ad valorem rate but on the value determined on the basis of MRP under Section 4A or on tariff value fixed under Section 3(2), would be that the net duty payable by the manufacturer after adjusting the Cenvat Credit would depend upon the location of the place of removal i.e. location of depot, consignment agent‟s premises or customers‟ premises (in case of FOR sales), as while the duty payable on the final products at specific rate or at ad valorem rate on tariff value or on the value determined under section 4A is fixed, the Cenvat Credit on account of availability of credit in respect of GTA Service and other services availed up to the „place of removal‟ would vary. It would be advantageous for a manufacturer to have sales on FOR destination basis or from far off depots/Consignment Agent‟s premises, as without increase in his gross duty liability on the goods, he gets more Cenvat Credit. This advantage would not be there if duty on the final product is chargeable at ad valorem rate on the value determined under Section 4, as while the manufacturer will be getting Cenvat Credit of the Service Tax paid on GTA Service and other services availed up to the place of removal i.e. Depot or consignment agents premises or Customers‟ Premises (in case of FOR sale), he will also have to pay duty on higher value which would include the freight expenses and value of other services availed up to the „place of removal‟.
The net duty liability after adjusting the Cenvat Credit should not vary much with the change of location of the place of removal as :-
(a) Hon‟ble Bombay High Court in case of Coca Cola India Pvt. Ltd. v. CCE, Pune-III, reported in 2009 (242) E.L.T. 168 18 Excise Appeal No.52592 of 2014 (Bom.) = 2009 (15) S.T.R. 657 (Bom.) taking note of amendment to Section 3(1) of the Central Excise Act, 1944 w.e.f. 12-5-2000, has, in Para 33 of the judgment, held that "the above amendment will show that the manifest object of legislature is to levy and collect excise duty as value added tax"; and
(b) since value added tax operates by taxing final product and giving credit of duty the suffered by the inputs or input services, and since the tax on value addition is the difference between the tax on the final product and the tax on inputs and/or input services, for value added tax on any goods cleared by a manufacturer to neutral with regard to „place of removal‟, increase in input/input service credit should be accompanied by increase in the tax on the final product.
10.1 Therefore the Appellant‟s plea based on the Board‟s Circular No. 137/3/2006-CX-4, dated 2-2-2006 is against the very character of the Central Excise duty which is to be collected as a value added tax. The Board‟s Circular No. 137/3/2006-CX-4, dated 2-2-2006 clarifying that the definition of „place of removal‟ as given in Section 4(3)(c) is to be adopted for the purpose of Cenvat Credit Rules, 2004 even in cases when the final products are chargeable to duty at specific rate or at ad valorem rate on value determined under Section 4A, is contrary to the provisions of law. In fact, the view that the issue of valuation and the issue of Cenvat Credit on inputs/input service are two independent issues having no connection, is not a correct view and the same has not even been affirmed by Hon‟ble Karnataka High Court in its judgment reported in 2011 (23) S.T.R. 97 (Kar.). In the case of LG Electronics Ltd. (supra) cited by the learned counsel for the Appellant, the Tribunal had simply relied upon the Board‟s Circular No. 137/3/2006-CX-4, dated 2-2-2006 and had not gone into the question of its correctness.
11. The finished goods in these appeals are cement on which during the period of dispute, the tariff rate of duty was always 19 Excise Appeal No.52592 of 2014 a specific rate. Even the effective rate of duty in respect of cement packed in 50Kg packs was at specific rate and only in the cases of cement not in packed condition and sold to industrial consumers, the rate of duty was 8% ad valorem or Rs. 230/- per MT, whichever is higher/14% ad valorem or Rs. 400 per MT, which is higher, which can be treated as ad valorem rate. Therefore, only in the cases where the rate of duty is ad valorem chargeable on value determined under section 4 and the Appellant‟s sales were on FOR destination basis in terms of the criteria prescribed in this regard in Board Circular dated 23-8-2007, the Cenvat Credit of Service Tax paid on GTA Service availed up to the customers‟ premises would be admissible. In other cases, where the rate of duty is specific, the „place of removal‟ would be the factory gate and as such there would be no question of permitting Cenvat Credit of Service Tax paid on GTA Service availed for outward transportation of the cement from the factory to Depot/Dump or the Customers‟ Premises....."
8. In appeal filed against the said order, Hon‟ble Chattisgarh High Court as reported at [2014 (35) S.T.R. 641 (Chhattisgarh)] observed as under;
"24. Rule 2(l) of the Rules provides „input services‟ to mean, apart from other things, the service used by the manufacturer for clearance of the final product upto the place of removal. It further clarifies that input service includes an outward transportation upto the place of removal.
25. In this case, the Tribunal has held that in case where the excise duty is charged on the specified rate, then the place of removal is the gate of the factory. It has been held as presumption of law.
26. There is no provision in the Act or in the Rules or in any circular issued by the Board of Central Excise and Customs, New Delhi (the Board) to hold that in case the 20 Excise Appeal No.52592 of 2014 duty is charged on the specified rate, then the place of removal will be factory gate.
27. If the legislature or the Central Government, or the Board wanted the „place of removal‟ to be the factory gate in case of payment of excise duty on specified rate then they could so define it in the Act or in the Rules or in any of the circulars. They having failed to do so have clarified their intention that in such a case factory gate cannot be place of removal as a presumption of law.
28. In view of above, the presumption by the Tribunal that the place of removal is factory gate of the manufacturer in case the excise duty is charged on the specified rate, is incorrect.
29. A Division Bench of this Court in which one of us was a member, namely Tax Case - 34 of 2011 (Lafarge India Limited v. Commissioner, Central Excise, Raipur) (the Lafarge case) [2014 (35) S.T.R. 645 (Chhattisgarh)] has held as follows :
„18. Section 4 of the Act is titled as „Valuation of excisable goods for purpose of charging of duty of excise‟. Though, Section 4(3)(c) defines the word „place of removal‟ for purpose of that section but in absence of its meaning for other sections, it would be applicable unless it is otherwise provided.
19. In Section 4(3)(c), „Place of removal (see Appendix-
III) means-- ... a depot, premises, ... or any other place ... from where the excisable goods are to be sold after their clearance from the factory.
20. If under the terms of the contract, the sale takes place at the destination then that place may be the place of removal and Service Tax paid on the GTA-service for transporting the goods, upto destination might be available for taking cenvat credit.‟ 21 Excise Appeal No.52592 of 2014
30. In our opinion, it is to be decided on the facts and circumstances of each case as to what is the place of removal."
From the above order it is evident that the Hon‟ble High Court has observed that just for the reason that on some goods the rate of duty is specific it cannot be held place of removal is factory gate. The place of removal needs to be determined on basis of facts of each case. However Hon‟ble High Court has not given any observation in respect of the place of removal, in respect of the goods valued under Section 4A, the findings recorded in the order in respect of such goods has not been set aside, as the finding is based on the statutory provisions.
9. Hon‟ble Supreme Court has in case Ultratech Cement [2018 (9) G.S.T.L. 337 (S.C.)] observed as follows:
"4. As mentioned above, the assessee is involved in packing and clearing of cement. It is supposed to pay the Service Tax on the aforesaid services. At the same time, it is entitled to avail the benefit of Cenvat Credit in respect of any input Service Tax paid. In the instant case, input Service Tax was also paid on the outward transportation of the goods from factory to the customer‟s premises of which the assessee claimed the credit. The question is as to whether it can be treated as „input service‟.
5. „Input service‟ is defined in Rule 2(l) of the Rules, 2004 which reads as under :
"2(l) "input service" means any service :-
(i) Used by a provider of taxable service for providing an output services; or
(ii) Used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating 22 Excise Appeal No.52592 of 2014 to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal;"
6. It is an admitted position that the instant case does not fall in sub-clause (i) and the issue is to be decided on the application of sub-clause (ii). Reading of the aforesaid provision makes it clear that those services are included which are used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products „upto the place of removal‟.
7. It may be relevant to point out here that the original definition of „input service‟ contained in Rule 2(l) of the Rules, 2004 used the expression „from the place of removal‟. As per the said definition, service used by the manufacturer of clearance of final products „from the place of removal‟ to the warehouse or customer‟s place etc., was exigible for Cenvat Credit. This stands finally decided in Civil Appeal No. 11710 of 2016 (Commissioner of Central Excise Belgaum v. M/s. Vasavadatta Cements Ltd.) vide judgment dated January 17, 2018. However, vide amendment carried out in the aforesaid Rules in the year 2008, which became effective from March 1, 2008, the word „from‟ is replaced by the word „upto‟. Thus, it is only „upto the place of removal‟ that service is treated as input service. This amendment has changed the entire scenario. The benefit which was admissible even beyond the place of removal now gets terminated at the place of removal and doors to the Cenvat credit of input tax paid gets closed at that place. This credit cannot travel therefrom. It becomes 23 Excise Appeal No.52592 of 2014 clear from the bare reading of this amended Rule, which applies to the period in question that the Goods Transport Agency service used for the purpose of outward transportation of goods, i.e. from the factory to customer‟s premises, is not covered within the ambit of Rule 2(l)(i) of Rules, 2004. Whereas the word „from‟ is the indicator of starting point, the expression „upto‟ signifies the terminating point, putting an end to the transport journey. We, therefore, find that the Adjudicating Authority was right in interpreting Rule 2(l) in the following manner :
"... The input service has been defined to mean any service used by the manufacturer whether directly or indirectly and also includes, interalia, services used in relation to inward transportation of inputs or export goods and outward transportation upto the place of removal. The two clauses in the definition of „input services‟ take care to circumscribe input credit by stating that service used in relation to the clearance from the place of removal and service used for outward transportation upto the place of removal are to be treated as input service. The first clause does not mention transport service in particular. The second clause restricts transport service credit upto the place of removal. When these two clauses are read together, it becomes clear that transport services credit cannot go beyond transport upto the place of removal. The two clauses, the one dealing with general provision and other dealing with a specific item, are not to be read disjunctively so as to bring about conflict to defeat the laws‟ scheme. The purpose of interpretation is to find harmony and reconciliation among the various provisions.
15. Credit availability is in regard to „inputs‟. The credit covers duty paid on input materials as well as tax paid on services, used in or in relation to the manufacture of the „final product‟. The final products, manufactured by the assessee in their factory premises and once the final 24 Excise Appeal No.52592 of 2014 products are fully manufactured and cleared from the factory premises, the question of utilization of service does not arise as such services cannot be considered as used in relation to the manufacture of the final product. Therefore, extending the credit beyond the point of removal of the final product on payment of duty would be contrary to the scheme of Cenvat Credit Rules. The main clause in the definition states that the service in regard to which credit of tax is sought, should be used in or in relation to clearance of the final products from the place of removal. The definition of input services should be read as a whole and should not be fragmented in order to avail ineligible credit. Once the clearances have taken place, the question of granting input service stage credit does not arise. Transportation is an entirely different activity from manufacture and this position remains settled by the judgment of Honorable Supreme Court in the cases of Bombay Tyre International - 1983 (14) E.L.T. 1896 (S.C.), Indian Oxygen Ltd. - 1988 (36) E.L.T. 723 (S.C.) and Baroda Electric Meters - 1997 (94) E.L.T. 13 (S.C.). The post removal transport of manufactured goods is not an input for the manufacturer. Similarly, in the case of M/s. Ultratech Cements Ltd. v. CCE, Bhatnagar - 2007 (6) S.T.R. 364 (Tribunal), it was held that after the final products are cleared from the place of removal, there will be no scope of subsequent use of service to be treated as input. The above observations and views explain the scope of relevant provisions clearly, correctly and in accordance with the legal provisions."
8. The aforesaid order of the Adjudicating Authority was upset by the Commissioner (Appeals) principally on the ground that the Board in its Circular dated August 23, 2007 had clarified the definition of „place of removal‟ and the three conditions contained therein stood satisfied insofar as the case of the respondent is concerned, i.e. (i) regarding ownership of the goods till the delivery of the 25 Excise Appeal No.52592 of 2014 goods at the purchaser‟s door step; (ii) seller bearing the risk of or loss or damage to the goods during transit to the destination and; (iii) freight charges to be integral part of the price of the goods. This approach of the Commissioner (Appeals) has been approved by the CESTAT as well as by the High Court. This was the main argument advanced by the learned counsel for the respondent supporting the judgment of the High Court.
9. We are afraid that the aforesaid approach of the Courts below is clearly untenable for the following reasons :
10. In the first instance, it needs to be kept in mind that Board‟s Circular dated August 23, 2007 was issued in clarification of the definition of „input service‟ as existed on that date i.e. it related to unamended definition. Relevant portion of the said circular is as under :
"ISSUE : Up to what stage a manufacturer/consignor can take credit on the service tax paid on goods transport by road?
COMMENTS: This issue has been examined in great detail by the CESTAT in the case of M/s. Gujarat Ambuja Cements Ltd. vs. CCE, Ludhiana [2007 (6) S.T.R. 249 (Tri- D)]. In this case, CESTAT has made the following observations :-
"the post sale transport of manufactured goods is not an input for the manufacturer/consignor. The two clauses in the definition of „input services‟ take care to circumscribe input credit by stating that service used in relation to the clearance from the place of removal and service used for outward transportation upto the place of removal are to be treated as input service. The first clause does not mention transport service in particular. The second clause restricts transport service credit upto the place of removal. When these two clauses are read together, it becomes clear that transport service credit cannot go beyond transport upto the place of removal. The two clauses, the one dealing 26 Excise Appeal No.52592 of 2014 with general provision and other dealing with a specific item, are not to be read disjunctively so as to bring about conflict to defeat the laws‟ scheme. The purpose of interpretation is to find harmony and reconciliation among the various provisions".
Similarly, in the case of M/s. Ultratech Cements Ltd v. CCE Bhavnagar - 2007-TOIL-429-CESTAT-AHM = 2007 (6) S.T.R. 364 (Tribunal), it was held that after the final products are cleared from the place of removal, there will be no scope of subsequent use of service to be treated as input. The above observations and views explain the scope of the relevant provisions clearly, correctly and in accordance with the legal provisions. In conclusion, a manufacturer/consignor can take credit on the Service Tax paid on outward transport of goods up to the place of removal and not beyond that.
8.2 In this connection, the phrase „place of removal‟ needs determination taking into account the facts of an individual case and the applicable provisions. The phrase „place of removal‟ has not been defined in CENVAT Credit Rules. In terms of sub-rule (t) of Rule 2 of the said rules, if any words or expressions are used in the CENVAT Credit Rules, 2004 and are not defined therein but are defined in the Central Excise Act, 1944 or the Finance Act, 1994, they shall have the same meaning for the CENVAT Credit Rules as assigned to them in those Acts. The phrase „place of removal‟ is defined under Section 4 of the Central Excise Act, 1944. It states that, -
"place of removal" means -
(i) a factory or any other place or premises of production or manufacture of the excisable goods;
(ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be stored without payment of duty;27 Excise Appeal No.52592 of 2014
(iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory;
from where such goods are removed."
It is, therefore, clear that for a manufacturer/consignor, the eligibility to avail credit of the Service Tax paid on the transportation during removal of excisable goods would depend upon the place of removal as per the definition. In case of a factory gate sale, sale from a non-duty paid warehouse, or from a duty paid depot (from where the excisable goods are sold, after their clearance from the factory), the determination of the „place of removal‟ does not pose much problem. However, there may be situations where the manufacturer /consignor may claim that the sale has taken place at the destination point because in terms of the sale contract/agreement (i) the ownership of goods and the property in the goods remained with the seller of the goods till the delivery of the goods in acceptable condition to the purchaser at his door step; (ii) the seller bore the risk of loss of or damage to the goods during transit to the destination; and (iii) the freight charges were an integral part of the price of goods. In such cases, the credit of the Service Tax paid on the transportation up to such place of sale would be admissible if it can be established by the claimant of such credit that the sale and the transfer of property in goods (in terms of the definition as under Section 2 of the Central Excise Act, 1944 as also in terms of the provisions under the Sale of Goods Act, 1930) occurred at the said place."
11. As can be seen from the reading of the aforesaid portion of the circular, the issue was examined after keeping in mind judgments of CESTAT in Gujarat Ambuja Cement Ltd., 2007 (6) S.T.R. 249 (Tribunal) and M/s. Ultratech Cement Ltd., 2007 (6) S.T.R. 364 (Tri.- Ahd.). Those judgments, obviously, dealt with unamended Rule 28 Excise Appeal No.52592 of 2014 2(l) of Rules, 2004. The three conditions which were mentioned explaining the „place of removal‟ as defined under Section 4 of the Act, there is no quarrel upto this stage. However, the important aspect of the matter is that Cenvat Credit is permissible in respect of „input service‟ and the Circular relates to the unamended regime. Therefore, it cannot be applied after amendment in the definition of „input service‟ which brought about a total change. Now, the definition of „place of removal‟ and the conditions which are to be satisfied have to be in the context of „upto‟ the place of removal. It is this amendment which has made the entire difference. That aspect is not dealt with in the said Board‟s circular, nor it could be.
12. Secondly, if such a circular is made applicable even in respect of post amendment cases, it would be violative of Rule 2(l) of Rules, 2004 and such a situation cannot be countenanced.
13. The upshot of the aforesaid discussion would be to hold that Cenvat Credit on goods transport agency service availed for transport of goods from place of removal to buyer‟s premises was not admissible to the respondent."
10. The issue involved in the present case is not in respect of admissibility of credit in respect of GTA services upto the place of removal - depot, warehouse or retail outlet. But the issue is regards admissibility of CENVAT credit in respect of the services namely services of credit card, internet charges, professional service, rent, security guard charges, store maintenance charges, outward freight, membership fee and sale commission, received in these premises. In view of the decisions of the Hon‟ble Apex Court referred above distinction needs to be drawn between the services of GTA upto the place of removal and service received at the place of removal and for outward transportation. In view of the above the Cenvat credit in respect of the services received at the place of removal cannot be 29 Excise Appeal No.52592 of 2014 allowed. Further in case of the goods valued for the purpose of payment of duty under Section 4A, the definition of place of removal as per Section 4 would not be available.
11. The decision in the appellants own case Final Order No 70068/2016 dated 20.01.2016 cannot be binding precedent as the same has been passed relying on the decision of L G Electronics which has been has been set aside by the Hon‟ble Allahabad High Court, referred earlier, keeping the question of law open.
12. In view of the discussions as above and divergent views of the benches {L G Electronics and Ultratech Cement referred earlier) in the matter in my view the issue needs to be referred to Hon‟ble President for constitution of a larger bench to resolve the issues that arise in the present case.
Sd/-
(SANJIV SRIVASTAVA) MEMBER (TECHNICAL) In view of the above, following questions have referred to Hon‟ble President for referring the matter to Third Member for resolution in difference of opinion recorded:-
I. Whether in view of the opinion expressed by M(J), the appeal is to be allowed or II. Whether in view of the opinion expressed by learned M (T), the matter is to be referred to the Larger Bench.
(Order pronounced in open court on- 04 July, 2024) Sd/-
(P.K. CHOUDHARY) MEMBER (JUDICIAL) Sd/-
(SANJIV SRIVASTAVA) MEMBER (TECHNICAL) Akp 30 E/52592/2014 S.S. GARG The difference on the following issues recorded in terms of two separate orders passed by two learned Members of the original Division Bench has been placed before me to give my opinion as a Third Member:
(i) Whether in view of the opinion express by the learned Member (J), the appeal is to be allowed;
or
(ii) Whether in view of the opinion expressed by the learned Member (T), the matter is to be referred to the Larger Bench.
2. I have heard the learned Counsel for the appellant and perused the material on records; I have also gone through the various judgments relied upon by both the parties as well as perused the respective opinions recorded by both the learned Members.
3. Though the facts of the case have already been recorded in the Interim Order by the Members of the Original Bench, therefore, I shall not repeat the entire facts; but I will briefly take note of the facts of the case. The appellant is a company engaged in the manufacture of knitted readymade garments and woven readymade garments under the brand name of „Lacoste‟. Till 01.03.2011, readymade garments were exempt from payment of duty and hence the appellant was not availing any credit.
31 E/52592/2014 Subsequently vide Notification No. 12/2011-C.E. dated 01.03.2011, all goods bearing brand names and falling under Chapters 61, 62 and 63 (except falling under CETSH 6309 0000 and 6310) were made leviable to Central Excise duty and the Central Excise duty was paid on MRP under Section 4A. Therefore, with effect from March 2011, the appellant commenced dispatching finished branded readymade garments from the factory on payment of Central Excise duty on MRP after reducing the admissible abatement, in terms of Notification No. 20/2001-CE(NT) dated 30.04.2001, as amended. From the warehouse, some quantity of goods is sold to the franchisees and the remaining quantity of manufactured goods is stock transferred to the retail outlets of the appellant, from where the goods are sold to the customers. From the retail outlet a small trading is also done and in respect of which CENVAT Credit has already been reversed, therefore, the remaining CENVAT Credit is related to the goods manufactured and sold by the appellant at such retail outlet. The learned Commissioner vide the impugned order has confirmed the demand by denying CENVAT Credit on certain services availed at the retail outlet of the appellant. Aggrieved by the said order, the appellant filed appeal before the Tribunal wherein both the learned Members have recorded their separate opinions cited supra.
4.1 The learned Counsel for the appellant submits that the view taken by the Member (J) in the Interim Order is legally correct. He further submits that the Member (J) in para 5 of the Interim Order 32 E/52592/2014 has observed that the present case is covered by the decision of the Tribunal in the appellant‟s own case [Final Order No. 70068/2016 dated 20.01.2016, period involved from April 2011 to March 2012; and also Final Order No. 71079/2017 dated 05.09.2017, period involved from January 2013 to February 2013].
He further submits that the Tribunal in the appellant‟s own case (cited supra) for the earlier period has relied on the decision in the case of L.G. Electronics India Pvt Ltd vs. CCE, Noida - 2010 (19) STR 340 (Tri. Delhi), wherein it has been held that if deliveries are on F.O.R. basis then the point of sale will be treated as the „place of removal‟ and CENVAT Credit upto that place would be admissible.
4.2 He further submits that the Member (J) has also recorded in para 7 of the Interim Order that the ratio of the judgment in the case of Metro Shoes Pvt Ltd vs. CCE - 2008 (10) STR 382 (Tribunal) squarely applies to the present case. The said judgment of the Tribunal in the case of Metro Shoes Pvt Ltd was affirmed by the Hon‟ble Bombay High Court reported as 2012 (28) STR J19 (Bom.).
4.3 He has also cited many judgments to justify that the CENVAT Credit availed on input services falls in definition of „input service‟ as prescribed in Rule 2(l) of Cenvat Credit Rules, 2004.
33 E/52592/2014 4.4 The learned Counsel further submits that the Member (T) has recorded the different opinion and has observed in Interim Order as follows:
a). There is no concept of place of removal in respect of goods assessed under Section 4A.
b). The provisions of Section 4 are not applicable to Section 4A. If for purpose of determination of value of the goods for payment of duty the provisions of Section 4, including the concept of place of removal as per that section has been specifically excluded for the goods in respect of which section 4A applies the same could not have been imported for these goods for determining admissibility to CENVAT Credit in terms of Rule 2(l) of Cenvat Credit Rules, 2004.
c). The value determined in terms of Section 4A is at the place of manufacture.
d). The decision in the matter of L.G. Electronics [2010 (19) STR 340 (Tri-Del)] was considered by the Hon'ble High Court [2016 (44) STR 249 (ALL)].
e). Subsequently the decision of the Tribunal in the case of L.G. Electronics has been departed by Delhi bench in case of Ultratech Cement Ltd [2014 (35) STR.
751 (Tri-Del)]. The Hon'ble High Court in Ultratech 34 E/52592/2014 Cement Ltd case [2014 (35) STR. 641 (Chhattisgarh)] has not set aside the finding of the Tribunal. It was observed that from the above order it is evident that the Hon'ble High Court has observed that just for the reason that on some goods the rate of duty is specific it cannot be held place of removal is factory gate. The place of removal needs to be determined on basis of facts of each case. However, Hon'ble High Court has not given any observation in respect of the place of removal, in respect of the goods valued under Section 4A, the findings recorded in the order in respect of such goods has not been set aside, as the finding is based on the statutory provisions.
f). The decision in the appellant‟s own case [Final Order No. 70068/2016 dated 20.01.2016] cannot be binding precedent as the same has been passed relying on the decision of L.G. Electronics which has been set aside by the Hon'ble Allahabad High Court, referred earlier, keeping the question of law open.
4.5 The learned Counsel further submits that the opinion expressed by the Member (T) cited above is not sustainable in law.
He further submits that the decision of the Tribunal in the matter of L.G. Electronics [2010 (19) STR 340 (Tri-Del)] has not been set aside by the Hon‟ble Allahabad High Court and the Member (T) has wrongly noted in his opinion that the decision of the Tribunal in the 35 E/52592/2014 matter of L.G. Electronics [2010 (19) STR 340 (Tri-Del)] was set aside by the Hon‟ble Allahabad High Court. He further submits that the Tribunal in the matter of L.G. Electronics [2010 (19) STR 340 (Tri-Del)] remanded the matter to the adjudicating authority with the following direction:
"Therefore, for this purpose, the matter will have to be remanded to the Commissioner for giving his specific findings after hearing the appellant and, if there is evidence on record that the appellant's sales were on FOR destination basis satisfying the conditions in this regard in the above-mentioned Circular dated 23.08.2007 of the Board, the Cenvat Credit of service tax paid on the GTA service availed for transportation of the goods up to the customer's premises would have to be allowed."
He further submits that the Hon'ble High Court endorsed such direction, which cannot be termed as setting aside of the decision of the Tribunal.
4.6 The learned Counsel further submits that the decision of the Hon'ble Tribunal in the matter of Ultratech Cement Ltd [2014 (35) S.T.R. 751 (Tri-Del)] was set aside by the Hon'ble High Court in Ultratech Cement Ltd‟s case [2014 (35) S.T.R. 641 (Chhattisgarh)].
He further submits that the Tribunal in the above said case adopted a reasoning that in cases where goods are assessed with specific rate of duty or under Section 4A, then the provisions of Section 4 including the definition of „place of removal‟ is not applicable.
36 E/52592/2014 However, the said finding was set aside by the Hon‟ble High Court as recorded in para 25 to 31 of the judgment in Ultratech Cement Ltd‟s case [2014 (35) S.T.R. 641 (Chhattisgarh)].
4.7 He further submits that the Tribunal in both the matters of L.G. Electronics and Ultratech Cement adopted the reasoning without differentiating assessment with specific rate of duty and assessment under Section 4A. Once a decision has been set aside by higher appellate authority, then it cannot be said that any particular finding in the order is survived.
4.8 He further submits that the Member (T) first relied upon the decision given in the matter of Ultratech to bring the point that the Tribunal departed from the decision in the matter of L.G. Electronics and then held that the finding of the Tribunal in respect of goods valued under Section 4A has not been set aside by the Hon'ble High Court. Such reasoning is not legally correct and is contrary to the doctrine of merger of decisions. For this, he relies on the decision in the case of P & B Pharmaceuticals Ltd. vs. Union of India [2011 (273) E.L.T. 34 (Guj.)].
4.9 He further submits that in the case of Ultratech Cement Ltd.
vs. CCE Rohtak [2015 (37) STR 364 (Tri-Del)], the Tribunal has recorded its findings in para 11 as under:
"11. In M/s. Ultratech Cement Ltd. v. CCE, Raipur, 2014-TIOL-478- CESTAT-DEL 2014 (35) S.T.R. 751 (Tri.-Del.) [a judgment inter partes], this Tribunal, 37 E/52592/2014 following earlier judgments including the judgment in Gujarat Ambuja Cements Ltd. v. CCE, Ludhiana (supra), ruled that in cases where the duty on the final product is levied at a specific rate or on ad valorem rate but the value determined on the basis of MRP under Section 4A or on tariff value fixed under Section 3(2), the place of removal would be the factory gate. This judgment was reversed by the Chhattisgarh High Court in Ultratech Cement Ltd. v CCE, Raipur reported in 2014-TIOL-1437-HC-
Chhattisgarh-CX = 2014 (307) E.LT. 3 (Chhattisgarh). The High Court followed its earlier decision in Lafarge India Ltd. v. CCE, Raipur reported in 2014 (307) E.LT. 7 (Chhattisgarh) The High Court clearly ruled that there is no provision in the Central Excise Act, 1944 or its rules or in any Circular issued by the Board, that where duty is charged on a specified rate, the place of removal would invariably be the factory gate. The place of removal would depend upon the specific transaction in issue and where the removal is pursuant to sales on FOR basis, with the risk in the goods manufactured being borne by the manufacturer till delivery to the customer at its premises and where the composite value of sales include the value of freight involved in delivery at the customer's premises, the place of removal would not be at the factory gate, but at the customer's premises, held the High Court."
He further submits that the Member (T) did not notice the above referred subsequent decision in the matter of Ultratech Cement cited supra which shows that there was no decision which is 38 E/52592/2014 contrary to the decision of the L.G. Electronics, which still is a binding precedent.
4.10 As regards the concept of place of removal under Section 4A, the learned Counsel submits that the words used in section 4A(2) are "notwithstanding anything contained in Section 4, such value shall be deemed to be the retail sale price declared on such goods less such amount of abatement, if any, from such retail sale price as the Central Government may allow by notification in the official Gazette". The use of words "Notwithstanding" has not been used to give overriding effect to Section 4A over Section 4 in respect of all and everything so stated in Section 4. He also submits that overriding effect has been given by use of the word "Notwithstanding" is only in respect of the value determined with reference to MRP/RSP only and the meaning given in the remaining provision of Section 4 can be adopted in cases where goods are assessed under Section 4A. He further submits that though Section 4(3) contains the clause "for the purpose of this section", but once the Central Excise Rules [Rule 2(i)] as well as the CENVAT Credit Rules [Rule 2(t)] borrows the meaning of the words used in the Central Excise Act, then a harmonious reading is required in particular the phrase "place of removal". Otherwise for the same reasoning, even determination of time of removal of goods for the purposes of payment of duty may also be difficult for the goods assessed under Section 4A. He also submits that the use of the words „place of removal‟ in the definition of input services may not 39 E/52592/2014 be applicable to goods assessed under Section 4A. Therefore, a harmonious construction of the provisions is required.
4.11 The learned Counsel also relies on the decision of Hon‟ble Rajasthan High Court in the case of CCE Udaipur vs. Mangalam Cement Ltd - 2018 (9) GSTL 17 (Raj.), wherein the Hon‟ble High Court has held that the definition of place of removal is applicable for goods assessed under Section 4A. The relevant observations are reproduced below:
"12. The question come first is whether Rule 4(c) will come into operation or not. In view of Section 2(t), it is very clear that the meaning does not define under the Cenvat Credit Rules, 2004 then the meaning is to be derived from the provisions of the Act.
13. In that view of the matter, though Mr. Ranka contended that 3(2) prohibits it only for the purpose of defence services under 4(c) since no other place, the word 'removal' has been defined. In that view of the matter to come out to a conclusion for removal of the goods, the meaning which has been defined under 4(c) is required to take into account. Regarding Rule 9 which is for the registration, in our considered opinion, the Rule 9 of Registration will apply only in a case where assessee deferred payment of excise duty at the time of delivery. In that case, the registration is required to be given for the purpose of payment of excise duty while taking benefit under the Cenvat Credit Rules, 2004, the assessee has to fulfill the conditions which are required to be operating under the Rules more 40 E/52592/2014 particularly the input services which is defined under 2(l), taking into consideration 2(t), the interpretation put forth by the Tribunal issue wise, on the first issue GTA services in view of five High Court judgments referred above, taking view in favour of the assessee, the service which are required to be for the purpose of manufacturing and delivering will come within the purview of 2(l), outdoor catering services are also required to be carried out for delivering or manufacturing his also governed by the different four High Courts judgments Bombay High Court and Gujarat."
4.12 He further refers to CBIC Circular No. 988/12/2014-CX dated 20.10.2014 wherein it has referred to its earlier Circulars dated 03.03.2003 and 28.08.2007 and then reiterated the definition of place of removal inserted in the Cenvat Credit Rules as follows:
"(6) It is reiterated that the place of removal needs to be ascertained in term of provisions of Central Excise Act, 1944 read with provisions of the Sale of Goods Act, 1930. Payment of transport, inclusion of transport charges in value, payment of insurance or who bears the risk are not the relevant considerations to ascertain the place of removal. The place where sale has taken place or when the property in goods passes from the seller to the buyer is the relevant consideration to determine the place of removal."
4.13 He further submits that undisputedly, the goods which were sold from retail outlet were sold first time to customers and 41 E/52592/2014 property in goods passed to the buyers from the appellant and thus, the place of removal would be the retail outlet of the appellant and Credit of service tax paid on input services received and used at such outlet is admissible.
4.14 He further submits that even assuming that the definition of place of removal as provided in Section 4 is not applicable to goods assessed under Section 4A, even then also, credit is admissible in view of various Cenvat Credit Rules.
4.15 The learned Counsel also relies on the decision of Hon‟ble Bombay High Court in the case of Deepak Fertilizers & Petrochemicals Corporation Ltd vs. Commissioner - 2013 (32) STR 532 (Bom.), wherein the Hon‟ble High Court has held as under:
"5. Now at the outset it must be noted that Rule 3(1) allows a manufacturer of final products to take credit inter alia of Service Tax which is paid on (i) any input or capital goods received in the factory of manufacturer of the final product; and (ii) any input service received by the manufacturer of the final product. The subordinate legislation in the present case makes a distinction between inputs or capital goods on the one hand and input services on the other. Clause (i) above provides that the Service Tax should be paid on any input or capital goods received in the factory of manufacture of the final product. Such a restriction, however, is not imposed in regard to input services since the only stipulation in clause (ii) is that the input services should be received by the manufacturer of the final product.
42 E/52592/2014 Hence, even as a matter of first principle on a plain and literal construction of Rule 3(1) the Tribunal was not justified in holding that the appellant would not be entitled to avail of Cenvat credit in respect of services utilized in relation to ammonia storage tanks on the ground that they were situated outside the factory of production. The definition of the expression 'input service' covers any services used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products. The words 'directly or indirectly and 'in or in relation to' are words of width and amplitude. The subordinate legislation has advisedly used a broad and comprehensive expression while defining the expression 'input service'. Rule 2(l) initially provides that input service means any services of the description falling in sub- clauses (i) and (ii). Rule 2(l) then provides an inclusive definition by enumerating certain specified services. Among those services are services pertaining to the procurement of inputs and inward transportation of inputs. The Tribunal, proceeded to interpret the inclusive part of the definition and held that the Legislature restricted the benefit of Cenvat credit for input services used in respect of inputs only to these two categories viz. for the procurement of inputs and for the inward transportation of inputs. This interpretation which has been placed by the Tribunal is ex facie contrary to the provisions contained in Rule 2(l). The first part of Rule 2(l) inter alia covers any services used by the manufacturer directly or indirectly, in or in relation to the manufacture of final products. The inclusive part of the definition enumerates certain specified categories of services. However, it would be 43 E/52592/2014 farfetched to interpret Rule 2(1) to mean that only two categories of services in relation to inputs viz. for the procurement of inputs and for the inward transportation of inputs were intended to be brought within the purview of Rule 2(l). Rule 2(l) must be read in its entirety. The Tribunal has placed an interpretation which runs contrary to the plain and literal meaning of the words used in Rule 2(l). Moreover, as we have noted earlier, whereas Rule 3(1) allows a manufacturer of final products to take credit of excise duty and Service Tax among others paid on any input or capital goods received in the factory of manufacturer of the final product, insofar as any input service is concerned, the only stipulation is that it should be received by the manufacturer of the final product. This must be read with the broad and comprehensive meaning of the expression 'input service' in Rule 2(l). The input services in the present case were used by the appellant whether directly or indirectly, in or in relation to the manufacture of final products. The appellant, it is undisputed, manufactures dutiable final products and the storage and use of ammonia is an intrinsic part of that process."
4.16 He further submits that the definition of „input services‟ also establishes that there is no restriction on place where such service will be received except in respect of storage of goods or outward transportation of goods. He further submits that services received in this case were credit card service, internet charges, professional service, rent, security guard charges, store 44 E/52592/2014 maintenance & cleaning charges, telephone charges, online maintenance charges, outward freight, membership fee and sale commission, which are specifically covered under the inclusive part of the definition of „input services‟. He also submits that all these services were used to promote the sale of goods and sales promotion, which are specifically included in the inclusive part of the definition of „input services‟. Therefore, credit was otherwise also admissible on these services.
4.17 He further submits that finding "the value determined in terms of Section 4A is at the place of manufacture" has been set aside by the Larger Bench in the matter of Sweety Industries vs. Commissioner of CGST, Vadodara-I [Interim Order No. 24/2024 dated 14.02.2024 - Tribunal Ahmedabad (LB)]. He further submits that the Larger Bench of the Tribunal in the case of Sweety Industries (supra) dealt with following finding of the Commissioner (Appeals) by setting aside the demand:
"In terms of aforesaid judgment that when the goods are removed under Section 4A of the Central Excise Act, 1944 the place of removal is factory gate. Even otherwise also, the abatement provided to them on the MRP takes care of all the expenses beyond factory gate only and hence, place of removal for such products is factory gate only. In the instant case also it is factory gate and in view of the said judgment I uphold the denial of Cenvat credit."
He further submits that the Larger Bench of the Tribunal held the decision of the Hon'ble Supreme Court in the matter of Ultratech 45 E/52592/2014 Cement Ltd. [2018 (9) G.S.T.L. 337 (S.C.)] has not decided what will be the place of removal for availment of CENVAT Credit, rather it has only been held that credit will be admissible only upto the place of removal and the same has been clarified by the CBIC also by issuing Circular that the place of sale is „place of removal‟. He further submits that the Larger Bench specifically held in respect of goods, which are assessed under Section 4A and first time sold from the depot; the said findings are reproduced as under:
"26. According to the appellant, transportation charges form part of the assessable value/MRP and, therefore, service tax paid on transportation charges upto depot of Parle or the premises of the clearing and forwarding agent of Parle would be admissible in terms of the Board Circular dated 08.06.2018 as depot or premises of the clearing and forwarding agents would be the 'point of sale', ie the place of removal.
27. ******
28. ******
29. ******
30. At the time of clearance of the biscuits from the factory of the appellant to the depots/premises of clearing and forwarding agents of Parle, the appellant paid excise duty, which is reimbursed by Parle and the value of transportation of the goods from the factory of the appellant to the depots of Parle is included in the MRP of the biscuits in terms of section 4A(3) read with Explanation 1 of the Central Excise Act.
46 E/52592/2014 The relevant portion of section 4A(3) with the Explanation is reproduced below:
"4A(3). Valuation of excisable goods with reference to retail sales price -
(1) *** (2) *** (3) The Central Government may, for the purpose of allowing any abatement under sub-section (2), take into account the amount of duty of excise, sales tax and other taxes, if any, payable on such goods.
(4) *** Explanation 1. For the purposes of this section, "retail sales price" means the maximum price at which the excisable goods in packaged form may be sold to the ultimate customer and includes all taxes, local or otherwise, freight, transport charges, commission payable to dealers, and all charges towards advertisement, delivery, packing, forwarding and the like and the price is the sole consideration for such sale."
4.18 He further submits that the learned Commissioner in the impugned order has wrongly distinguished the case of Metro Shoes Pvt Ltd [2008 (10) STR 382 (Tri. Mum.)] and Coca Cola India Pvt Ltd [2009 (242) ELT 168 (Bom)].
4.19 The learned Counsel further submits that the definition of „input service‟ under Rule 2(l) of Cenvat Credit Rules includes any service used by the manufacturer whether directly or indirectly, in or in relation to the manufacture of final product and clearance of the final product upto the place of removal.
47 E/52592/2014 4.20 As regards interest and penalty, the learned Counsel submits that as the demand itself is not sustainable in law therefore, the question of interest and penalty does not arise.
5. On the other hand, the learned AR for the Revenue reiterates the findings of the impugned order and supports the view expressed by the Member (T).
6. I have considered the submissions made by both the parties and also perused the material on record and also have gone through the opinions recorded by both the learned Members in the Interim Order.
7. I find that the learned Member (J) while allowing the appeal of the appellant has mainly relied upon the decision of the Tribunal in the appellant‟s own case decided by Final Order No. 70068/2016 dated 20.01.2016 for the period from April 2011 to March 2012;
and also Final Order No. 71079/2017 dated 05.09.2017 for the period from January 2013 to February 2013. Further, I find that the learned Member (J) has observed that the appellant is eligible to Cenvat Credit of services at their retail outlet where the sales are affected on the basis of the Tribunal‟s decision in the case of L.G. Electronics (supra). I also find that the learned Member (J) has relied on the decision in the case of Metro Shoes Pvt Ltd (supra) which was affirmed by the Hon‟ble Bombay High Court and has held that the issue involved in the present case is similar to the facts in the case of Metro Shoes Pvt Ltd (supra). Whereas, the 48 E/52592/2014 learned Member (T) has observed that the decision of the Tribunal in the appellant‟s own case (cited supra) cannot be binding precedent as the same has been passed relying upon the decision in the case of L.G. Electronics which has been set aside by the Hon‟ble Allahabad High Court. I find that the finding of the learned Member (T) is contrary to the facts. In fact, the decision of the Tribunal in the case of L.G. Electronics has not been set aside by the Hon‟ble Allahabad High Court, rather the Hon‟ble High Court endorsed the direction given by the Tribunal and the same cannot be termed as setting aside the decision of the Tribunal. In this regard, the finding of the Hon‟ble Allahabad High Court is reproduced herein below:
"3. Tribunal while interpreting definition of 'input service' has noticed contention of assessee that sales of finished goods to their customers/dealers are on FOR destination basis and transport and transit insurance is arranged by assessee. The cost of transportation on FOR basis is integral part of price charged from customer and risk of damage to the goods or loss of goods during transit is of assessee. Tribunal has opined that if this claim set up by assessee is correct, claim of assessee of transportation of goods up to the place of consumer, either from Factory or from Depot, may be covered by definition of 'input service' and for that purpose it has remanded the matter by means of impugned judgment dated 12.04.2010 [2010 (19) S.T.R. 340 (Tribunal)].
49 E/52592/2014
4. In fact the question, whether price of goods is on FOR basis or not is an important aspect necessary to decide the question whether it can be included within 'input service' or not and since for determination thereof, matter has been remanded, therefore, in our view, it would not be appropriate at this stage to answer the substantial question of law formulated above and instead let the matter be decided by competent authority as per remand order passed by Tribunal after recording factual findings and, therefore, we leave this question open. Appellant may raise this question after matter is decided by competent authority pursuant to impugned order passed by Tribunal remanding the matter."
8. Further, I find that the learned Member (T) has observed that the Tribunal in the matter of Ultratech Cement Ltd [2014 (35) STR 751 (Tri. Del.)] has taken a contrary view than that of L.G. Electronics and the same has not been set aside by the Hon‟ble High Court of Chhattisgarh. This finding is also incorrect. In fact, the earlier decision in the case of Ultractech Cement Ltd [2014 (35) STR 751 (Tri. Del.)] has been set aside by the Chhattisgarh High Court [reported as 2014 (307) ELT 3 (Chhattisgarh)]. In this regard, it is pertinent to reproduce the relevant findings of the Hon‟ble High Court, which are reproduced herein below:
"25. In this case, the Tribunal has held that in case where the excise duty is charged on the specified rate, then the place of removal is the gate of the factory. It has been held as presumption of law.
50 E/52592/2014
26. There is no provision in the Act or in the Rules or in any circular issued by the Board of Central Excise and Customs, New Delhi (the Board) to hold that in case the duty is charged on the specified rate, then the place of removal will be factory gate.
27. If the legislature or the Central Government, or the Board wanted the 'place of removal' to be the factory gate in case of payment of excise duty on specified rate then they could so define it in the Act or in the Rules or in any of the circulars. They having failed to do so have clarified their intention that in such a case factory gate cannot be place of removal as a presumption of law.
28. In view of above, the presumption by the Tribunal that the place of removal is factory gate of the manufacturer in case the excise duty is charged on the specified rate, is incorrect
29. A Division Bench of this Court in which one of us was a member, namely Tax Case-34 of 2011 (Lafarge India Limited v. Commissioner, Central Excise, Raipur) (the Lafarge case) [2014 (35) STR. 645 (Chhattisgarh)] has held as follows:
18. Section 4 of the Act is titled as 'Valuation of excisable goods for purpose of charging of duty of excise. Though, Section 4(3)(c) defines the word 'place of removal for purpose of that section but in absence of its meaning for other sections, it would be applicable unless it is otherwise provided.
19. In Section 4(3)(c), 'Place of removal (see Appendix-III) means a depot, premises, or any other place ... from where the excisable goods are to be sold after their clearance from the factory.
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20. If under the terms of the contract, the sale takes place at the destination then that place may be the place of removal and Service Tax paid on the GTA-service for transporting the goods, upto destination might be available for taking cenvat credit.'
30. In our opinion, it is to be decided on the facts and circumstances of each case as to what is the place of removal.
31. In view of above, the two tax cases namely Tax Case - 8 and 9 of 2014 filed by the Assessee are partly allowed. The matter is sent back to the Commissioner-
Raipur to re-determine the question as to what is the place of removal whether it is factory gate of the Assessee, or it is the premises of the consumer. In case it is held that the place of removal is the premises of the consumer, then the Assessee will be entitled to take the Cenvat credit on such service as it will be deemed to be input service."
9. Further, I find that the Tribunal in the subsequent case of Ultratech Cement Ltd [2015 (37) STR 364 (Tri. Del.)] has specifically observed that the earlier decision in the case of Ultractech Cement Ltd [2014 (35) STR 751 (Tri. Del.)] was reversed by the Chhattisgarh High Court [reported as 2014 (307) ELT 3 (Chhattisgarh)]. In fact, this decision [2015 (37) STR 364 (Tri.
Del.)] of the Tribunal was not brought to the notice of the learned Member (T), otherwise the view recorded by the learned Member (T) would not have been there.
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10. Further, I find that as regards the concept of „place of removal‟ under Section 4A, the Hon‟ble Rajasthan High Court in the case of CCE Udaipur vs. Mangalam Cement Ltd (supra) has held that the definition of „place of removal‟ is applicable for the goods assessed under Section 4A.
11. Further, I find that the Larger Bench of the Tribunal in the matter of Sweety Industries (supra) has held that the decision of the Hon‟ble Supreme Court in the case of Ultratech Cement Ltd [reported as 2018 (9) GSTL 337 (SC)] has not decided what will be the place of removal for availment of CENVAT Credit. It has only been held that credit will be admissible only upto the place of removal.
12. Further, I find that the identical issues are involved in the case of Metro Shoes Pvt Ltd [reported as 2008 (10) STR 382 (Tri.
Mum.)] decided by the Tribunal; and the said decision has been upheld by the Hon‟ble Bombay High Court [reported as 2012 (28) STR J19 (Bom.)].
13. I also find that all the services in question are covered by the definition of „input services‟ as held in the various decisions of the Tribunal/the High Courts/the Supreme Court, wherein definition of „input service‟ as defined under the Cenvat Credit Rules has been conferred a very wide and expansive scope and has been held that any service used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products 53 E/52592/2014 constitutes input service and credit on those services should be allowed to the manufacturers. In this regard, relevant case-laws are as under:
Metro Shoes Pvt Ltd - 2008 (10) STR 382 (Tri. Mum.) All India Tax Federation of Tax Practitioners - 2007 (7) STR 625 (SC) Coca Cola India Pvt Ltd - 2009 (15) STR 657 (Bom.) CCE vs. Ultratech Cement - 2010 (260) ELT 369 (Bom.) In view of the above, I hold that the appellant is entitled to avail the credit on the input services as the services are included in the inclusive clause of the definition by description.
14. In view of my analysis above, I am of the considered view that the opinion expressed by the learned Member (Judicial) is legally correct and I also subscribe the same view; accordingly, I affirm the findings recorded by the learned Member (Judicial).
Further, I also hold that in view of the decisions of the High Court and the Larger Bench of the Tribunal cited supra, there is no need to further refer the matter to the Larger Bench of the Tribunal.
15. Now, let the matter be placed before the Regular Division Bench for drawing majority view.
(Order pronounced on 07.11.2024) Sd/-
(S. S. GARG) MEMBER (JUDICIAL) Excise Appeal No.52592 of 2014 54 In view of the majority order, the order for recovery of the Service Tax credit as also the interest are set aside, penalty is also set aside and appeal is allowed with consequential relief, as per law.
(Order pronounced in open court on-21 November, 2024) Sd/-
(P.K. CHOUDHARY) MEMBER (JUDICIAL) Sd/-
(SANJIV SRIVASTAVA) MEMBER (TECHNICAL) LKS