Custom, Excise & Service Tax Tribunal
Basf Construction Chemicals (I) Pvt. ... vs Cce Belapur on 31 January, 2019
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
COURT No.
APPEAL No. E/411/2011
(Arising out of Order-in-Appeal No. PKS/456/BEL/2010 dated
13.12.2010 passed by Commissioner of Central Excise (Appeals),
Mumbai-III)
BASF Construction Chemicals (I) Pvt. Ltd. Appellant
Vs.
Commissioner of Central Excise, Belapur Respondent
Appearance:
Shri Rajesh Ostwal, Advocate, for appellant Shri Sanjay Hasija, Superintendent (AR), for respondent CORAM:
Hon'ble Dr. D.M. Misra, Member (Judicial) Date of Hearing: 31.01.2019 Date of Decision: 31.01.2019 ORDER No. A/85240/2019 Heard both sides.
2. This is an appeal filed against order-in-appeal No. PKS/456/BEL/2010 dated 13.12.2010 passed by Commissioner of Central Excise (Appeals), Mumbai-III.
3. Briefly stated the facts of the case are that during the relevant period 1st January 2005 to 31st March 2008, the appellant had availed cenvat credit of service tax paid amounting to Rs.20,60,677/- on outward transport (GTA service). Alleging that the same does not fall under the scope of the definition of Rule 2(l) of 2 E/411/2011 Cenvat Credit Rules, 2004, show cause notice was issued to them for recovery of the said amount. On adjudication, the demand was confirmed with interest and penalty. Aggrieved by the said order, the appellant filed appeal before the learned Commissioner (Appeals) who, in turn, rejected their appeal. Hence, the present appeal.
4. Learned Advocate for the appellant submits that in the present case, the commission of sale was on FOB basis. The issue of eligibility of cenvat credit of the service tax paid on outward freight for the period prior to 01.4.2008 has now been settled by the Hon'ble Supreme Court in the case of CCE, Belgaum vs. Vasavadatta Cements Ltd. - 2018 (11) GSTL 3 (SC).
5. Learned AR for the Revenue reiterated the findings of the learned Commissioner (Appeals).
6. I have carefully gone through the submissions advanced and perused the records of the case. I find that the short issue involved in the present appeal relates to admissibility of cenvat credit of service tax paid on outward freight services (GTA service) for the period January 2005 to March 2008. The issue is no more res integra covered by the judgment of the Hon'ble Supreme Court in the case of Vasavadatta Cements Ltd. (supra). Their Lordships observed as follows:
3 E/411/2011
"7. As mentioned above, the expression used in the aforesaid Rule is "from the place of removal". It has to be from the place of removal upto a certain point. Therefore, tax paid on the transportation of the final product from the place of removal upto the first point, whether it is depot or the customer, has to be allowed.
8. Our view gets support from the amendment which has been carried out by the rule making authority w.e.f. 1-4-2008 vide Notification No. 10/2008-C.E. (N.T.), dated 1-3-2008 whereby the aforesaid expression "from the place of removal" is substituted by "upto the place of removal". Thus from 1-4-2008, with the aforesaid amendment, the Cenvat credit is available only upto the place of removal whereas as per the amended Rule from the place of removal which has to be upto either the place of depot or the place of customer, as the case may be. This aspect has also been noted by the High Court in the impugned judgment in the following manner :
"However, the interpretation placed by us on the words 'clearance of final products from the place of removal' and the subsequent amendment by Notification 10/2008-C.E. (N.T.), dated 1-3-2008 substituting the word 'from' in the said phrase in place of 'upto' makes it clear that transportation charges were included in the phrase 'clearance from the place of removal' upto the date of the said substitution and it cannot be included within the phrase 'activities relating to business'."
7. In view of the above judgment, the impugned order is set aside and the appeal is allowed with consequential relief, if any, as per law.
(Pronounced in court) (Dr. D.M. Misra) Member (Judicial) tvu