Custom, Excise & Service Tax Tribunal
Binani Zinc Ltd vs Commissioner Of Central Excise, ... on 31 January, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order No. 20159 / 2014 Appeal(s) Involved: E/286/2008-SM [Arising out of Order-in-Appeal No. 121/07 dated 14/01/2008 passed by the Commissioner of Central Excise, Customs & Service Tax, Cochin] Binani Zinc Ltd. Binanipuram P.O., Ernakulam - 683 502 Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax - Cochin C.R Building, I.S Press Road, Ernakulam, Cochin - 682 018, Kerala Respondent(s)
Appearance:
Mr. Sandeep Gopalakrishnan, Advocate Menon & Pai P.B. No.1911 IS Press Road, Cochin - 682 018 Kerala For the Appellant Mr. S. Teli, AR For the Respondent CORAM:
HON'BLE SHRI B.S.V. MURTHY, TECHNICAL MEMBER Date of Hearing: 31/01/2014 Date of Decision: 31/01/2014 1.1. The assessee had taken CENVAT credit of Rs. 13,22,424/- and Education Cess of Rs. 26,446/- totally amounting to Rs. 13,48,870/- as detailed in the Annexure-1 to this notice for the period from August 2005 to March 2006 on the service tax and education cess paid on the handling charges and selling commission paid by them. These charges were paid to dealers/selling agents for providing storage space outside factory premises at different locations such as Kolkata, Chennai, Mumbai, daman, Silvassa etc. The credit was taken on the strength of bills/invoices issued for such services. These services were provided/received outside the factory premises for purposes other than manufacturing activities, after clearances are made from the factory premises and therefore the said services cannot be termed as input services as per Rule 2(l) (ii) of CENVAT Credit Rules 2004.
1.2. Taking a view that credit taken was wrong, proceedings were initiated which has culminated in confirmation of the demand for CENVAT credit wrongly availed with interest.
2. Learned counsel submits that the credit of service tax paid on storage charges, GTA service and handling charges is admissible since all these services were received up to the place of removal only. It is his submission that the appellants were selling the goods through depot and depot was the place of removal.
3. Further the learned AR would submit that according to the findings by lower authority, the place of removal was factory gate only and according to the definition of input service in respect of storage charges and handling charges, the credit is admissible only up to the place of removal only. As regards GTA service in view of the decision of the Honble High Court in the case of CCE Vs. ABB Ltd. reported in [2011 (22) S.T.R. 386 (Kar.)], credit would be admissible since according to the decision of the Honble High Court, during the relevant time the definition of the input service allowed credit in respect of GTA services so long as it is from the place of removal. Therefore even though the factory gate was taken as place of removal, credit of service tax paid on GTA service would be available.
4. As regards storage and handling, I find that the appellants wrote a letter to the Commissioner (Appeals) on 05.11.2007 wherein they submitted that the clearances were from the depot only and place of removal was depot and they also enclosed a stock transfer invoice, sale invoice, transit insurance, freight bill copies and agreement. However the Commissioner (Appeals) has not indicated whether the letter was received in his office or not. On going through the letter, I find that there is no acknowledgment of the office of the Commissioner (Appeals) on the letter. No enclosures have been attached in the copy of the letter produced before the Tribunal also. Original authority also has not mentioned anything about the submissions made by the appellant that depot is the place of removal. That being the position, I am not in a position to come to the correct conclusion as to whether the claim of the assessee that depot is the place of removal is correct or not. In this view of the matter, since this is a very important factor and requires to be decided after verifying the documents, the matter has to be necessarily remanded to the original adjudicating authority.
5. In view of the above observation, the impugned order is set aside and the matter is remanded to the original adjudicating authority who shall decide the eligibility of the appellant for CENVAT credit of service tax paid on storage and handling charges on merits in accordance with law after giving reasonable opportunity to the appellants to present their case.
(Order dictated and pronounced in open court) (B.S.V. MURTHY) TECHNICAL MEMBER iss