Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, Bolpur vs M/S Super Smelters Ltd on 17 June, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL,
EAST REGIONAL BENCH : KOLKATA
Ex. Appeal Nos.644,645/10
Arising out of O/A Nos.24-25/Bol/2010 dated 26.02.2010 passed by Commr. of Central Excise, Bolpur.
For approval and signature:
DR. I. P. LAL, HONBLE TECHNICAL MEMBER
1. Whether Press Reporters may be allowed to see
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982? :
2. Whether it should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not? :
3. Whether His Lordship wishes to see the fair copy
of the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
Commissioner of Central Excise, Bolpur
APPELLANT(S)
VERSUS
M/s Super Smelters Ltd.
RESPONDENT (S)
APPEARANCE Shri S. Chakraborty, Asstt. Commr. (A.R.) for the Department Shri S. P. Majumder, Advocate for the Respondent (s) CORAM:
DR. I. P. LAL, HONBLE TECHNICAL MEMBER DATE OF HEARING & PRONOUNCEMENT : 17. 06. 2013 ORDER NO. A-172-173/Kol/13 Per Dr. I. P. Lal :
The present two appeals are filed by the Revenue against the Order-in-Appeal Nos.24-25/Bol/2010 dated 26.02.2010 passed by Commr. of Central Excise, Bolpur, whereby the ld. Commissioner (Appeals) has remanded the case to the lower adjudicating authority.
2. Briefly stated the facts of the case are that -
2.1 The respondent has availed/utilized cenvat credit of service tax paid on the outward transportation charges for delivery of goods to customers premises after clearance thereof from the factory. Two show-cause notices, namely, C.No.V(4)8/Adjn/SSL/DGP-I/2007/2040 dated 24.08.07 for recovery of Rs.3,13,000/- (which was availed as credit on outward freight in the month of Jan.07) and C.No.V(4)/13/Adjn/SSL/DGP-I/08/783 dated 14.02.08 for recovery of Rs.2,30,342/-(which was availed as credit on outward freight in the month of Feb.06) have been issued. It is alleged that the credit on the outward freight charges from the factory gate to the customers premises is not admissible. Show-cause notice dt.24.08.07 was adjudicated vide O/O No.18/AC/Dgp-I/2007-08 dated 14.02.08 confirming the duty of Rs.3,13,000/- along with interest thereon under Section 11AB of the Central Excise Act, 1944. He imposed penalty of Rs.10,000/-. The second show-cause notice dated 14.02.08 was decided vide O/O No.08/AC/Dgp-I/08-09 dated 30.06.08 disallowing credit of Rs.2,30,342/- along with interest at the appropriate rate and equal amount of penalty.
2.2 The Assistant Commissioner has purportedly relied upon the decision of the Tribunal in the case of Gujarat Ambuja Cement Ltd. Vs. CCEx. Ludhiana and decisions which have followed the same. It was held in this case that the transportation of goods or final product from the factory by an assessee to the customers place is not clearance upto the place of removal as is required in terms of Rule 2 (l)(ii) in Cenvat Credit Rules, 2004 and hence availment of cenvat credit on freight in respect thereof does not arise.
2.3 The ld.Commissioner (Appeals) set aside both the orders of the adjudicating authority and allowed the appeals by transmitting the case to the lower authority for necessary verification and disposal of the case in the light of in terms of the Boards Circular No. No.97/8/2007-ST dated 23.08.2007 issued from F.No.137/85/2007-CX.4.
2.4 The Revenue challenges the said remand on the ground that after amendment of Section 35A (3) of the Central Excise Act, 1944, the power of remand by the Commissioner (Appeals) has been taken away as held in the various judgments in case of MIL India Ltd. Vs. CCEx., Noida as reported in 2007 (210) ELT 188 (SC), in case of CC, Amritswar Vs. Enkay (India) Rubber Com. Ltd. as reported in 2008 (224) ELT 393 (P & H) and in case of CCEx., Jalandhar Vs. B. C. Kataria as reported in 2008 (221) ELT 508 (P & H). In view of these facts, it has been requested to set aside the order of the ld.Commissioner (Appeals) and remand back the case for fresh adjudication.
3. The ld. A.R. appearing for the Revenue, reiterated the grounds of appeal.
4. The ld.Advocate appearing on behalf of the respondent, has stated that the Revenue has not disputed the admissibility of cenvat credit. They have however challenged the power of Commissioner (Appeals) to remand back the case to the original authority.
5. Heard both sides and perused the records.
6. I find that the dispute is whether the cenvat credit is admissible on the outward transportation charges, in those cases, where the excisable goods were delivered at the customers premises. The other issue is whether the Commissioner (Appeals) has power to remand the case back to the lower adjudicating authority.
7. Regarding eligibility of credit, I find that the dispute relates to the period 2007-08 (upto February, 2008), it is seen from the definition of input service provided under Rule 2 (l) of Cenvat Credit Rules, 2004 that input service means any service (i) used by a provider of taxable service for providing an output service, or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacturer of final products and clearance of final products (from) the place of remaoval and includes.outward transportation upto place of removal. I find that place of removal is not defined in the Cenvat Credit Rules, 2004 and therefore, in terms of sub-rule (t) of Rule 2 of the Cenvat Credit Rules, 2004, if any words or expression 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 or the Cenvat Credit Rules, 2004 as assigned to them in those Acts. The phrase place of removal is defined in Section 4 of Central Excise Act, 1944. It states that Place of Removal means(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 thus clear that outward transportation charges upto a customers premises, can be treated as eligible input services provided it fulfills the various criterias laid down under Cenvat Credit Rules, 2004 and Section 4 of the Central Excise Act, 1944. I also find that the Boards Circular No.97/8/2007-ST dated 23.08.2007 issued from F.No.137/85/2007-CX.4, held 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 of place of removal under section 4 of the Central Excise Act, 1944. The relevant portion of the said Board Circular is reproduced below :
.. 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) I find that the Commissioner (Appeals) has categorically mentioned that the decision in case of Ambuja Cement (supra) relied upon by the lower adjudicating authority was reversed by the Honble High Court of Punjab & Haryana in the case of Ambuja Cement Ltd. Vs. Union of India as reported in 2009 (236) ELT 431 (P & H). Besides Boards Circular (cited supra) is squarely covered the issue involved. I, therefore, uphold the findings of the Commissioner (Appeals) that the credit on the said outward freight could be admissible provided the respondent fulfill all the conditions laid down in Boards Circular No.97/8/2007-ST dated 23.08.2007.
8. In so far as the power of remand by the ld. Commissioner (Appeals) is concerned, I find that this issue has been considered earlier by various appellate authorities. I find that there are catena of judgement on this subject, namely, (i) MIL India Ltd. Vs. CCEx., Noida as reported in 2007 (210) ELT 188 (SC), (ii) CC, Amritswar Vs. Enkay (India) Rubber Com. Ltd. as reported in 2008 (224) ELT 393 (P & H) and (iii) CCEx., Jalandhar Vs. B. C. Kataria as reported in 2008 (221) ELT 508 (P & H) holding that the ld. Commissioner (Appeals) has no power to remand the case back to the adjudicating authority after deletion of that power from Section 35A (3) of the Central Excise Act, 1944 by amendment made by the Finance Act, 2001. The Tribunal in the case of Commissioner of Central Excise, Noida v. Orient Crafts Ltd. reported in 2011 (21) S.T.R. 302 (Tri.-Del.), held that :
It is settled law that the Commissioner (Appeals) dealing with the appeals under Central Excise Act, 1944 lacks jurisdiction to remand the matter to the Adjudicating Authority. The law provides that in case the Commissioner (Appeals) finds any infirmity in the order passed by the Adjudicating Authority or the order is found to be unsustainable, the Commissioner (Appeals) is certainly entitled to set aside such order and thereupon pass an appropriate order on merits by himself but not to remand the matter. Being so, Commissioner (Appeals) dealing with the appeals in relation to the service tax also is not empowered to remand the matter but he has to decide the matter by himself.
Thus in case of service tax also, the Commissioner (A) is not empowered to remand the matter, he has to decide the matter by himself. Therefore the order of ld. Commissioner (Appeals) remanding the case to the lower authority, is not sustainable. However, I agree with the findings of the ld. Commissioner (Appeals). I find that the above aspects are required to re-examined by the lower adjudicating authority. Accordingly, I remand the matter to the lower adjudicating authority for deciding the issue afresh. It is made clear that all the issues are kept open. Needless to say, a reasonable opportunity of hearing may be given to the respondents. Appeal is allowed by way of remand.
Dictated and pronounced in the open Court.
Sd/
(DR. I. P. LAL) TECHNICAL MEMBER
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Ex. Appeal Nos.644,645/10