Custom, Excise & Service Tax Tribunal
M/S Birla Corporation Ltd vs Cce, Bhopal on 29 September, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
West Block No. 2, R.K. Puram, New Delhi 110 066.
Date of Hearing/Order: 29.9.2016
Appeal No. E/56018-56020/2014-EX(SM)
(Arising out of Order-in-Appeal No. BPL-EXCUS-ooo-APP-119-120-121-14-15 dated 1.9.2014 passed by the Commissioner (Appeals), Central Excise, Bhopal)
M/s Birla Corporation Ltd. Appellant
Vs.
CCE, Bhopal Respondent
Appearance Ms. Rinky Arora, Advocate - for the appellant Shri G.R. Singh, A.R. - for the respondent CORAM: Honble Mr. V. Padmanabhan, Member (Technical) Final Order No. 53954-53956/2016 Per V. Padmanabhan :
These three appeals are directed against the common order dated 1st September 2014 passed by the Commissioner (Appeals), Bhopal in which he decided the issue which was originally decided under three different Orders-in-Original. The present controversy pertains to the Cenvat credit availed by the appellants on the service tax paid on outward transportation of the appellants final product i.e. cement from their factory gate to the customers premises. The Cenvat credit stands disallowed by both the authorities below and hence the present appeal.
2. I have heard ld. Advocate Ms. Rinky Arora for the appellant and ld. DR Shri M.R. Sharma for the Respondent.
3. The ld. Advocate submitted that the demand in the present case, which covers the period October 2011 to March 2013, through three different orders, is after 2008 when certain amendments were carried out in the definition of input service under Rule 2(l) of the Cenvat Credit Rules 2004. She submitted that the clearances have been made under FOR destination and that the appellant has the responsibility to bear the expenses as well as the risk of the final product until it reaches customers premises. Since the amended provision of the definition of input service allows Cenvat credit of service tax paid on GTA up to the place of removal, credit will be admissible to them, in as much as the place of removal in this case becomes the customers premises. He in turn relied upon several case laws in which the benefit stands allowed where the clearances are FOR destination. Specifically she refers to the following :
(i) Madras Cements Ltd. Vs. Additional Commr. of Central Excise, Bangalore 2015 (40) STR 645 (Kar.)
(ii) Final Order No. 52252-52254/2016 dated 27.6.2016
(iii) New Allenberry Works Vs. CCE, New Delhi 2015 (37) STR 303 (Tri.-Del.)
4. She also submits that the contracts under which cement has been cleared are very old and do not clearly mention in the terms that these are FOR destination. She submits that Chartered Accountant certificates covering the entire period of demand stand submitted to the Commissioner (Appeals) to the effect that the cement sold by the appellant is on FOR basis. However, the Commissioner (Appeals) has not given any findings on these certificates.
5. The ld. DR, on the other hand reiterated the findings of the authorities below and placed reliance on the decision of Honble Kolkata High Court in the case of CCE Vs. Vesuvious India Ltd. 2014 (34) STR 26 (Cal.). He further submits that on the certificates issued by the Chartered Accountant and submitted before the Commissioner (Appeals) by the appellants, no verification appears to have been made. These have also not been discussed in the impugned order.
6. Cenvat credit stands availed by the appellants on the service tax paid on GTA services utilized for transporting the finished products from the appellants premises to the destination. The claim of the appellant is that Cenvat credit will be admissible under input services for which service tax stands paid, inasmuch as the definition of input services after its amendment 2008, permits such credits up to the place of removal. The claim of the appellant is that the supplies are FOR destination and hence the customers premises should be considered as place of removal. In support of their claim, they have submitted copies of the certificate issued by Chartered Accountant. These certificates stand submitted to the Commissioner (Appeals) who has not dealt with such certificates in her order.
7. I find that this issue stands considered and decided by various decisions of different High Courts. Karnataka High Court in the case of CCE Vs. Vasavadatta Cements Ltd. - 2011 (24) STR 542 (Kar.) and also the decision of Honble Chhattisgarh High Court in the case of Ultratech Cement Vs. CCE - 2014 (37) ELT 3 (Chhattisgarh) have decided the issue in favour of the assessee in cases where the delivery is FOR destination and the seller has borne risk of the goods until the customers door step. However, there is contra decision of the Honble High Court Kolkata in the case cited by ld. DR. At this stage, I find that majority of the decisions are in favour of the assessee.
8. The decision also needs verification of the facts in the question - whether the supplies made by the appellant are indeed on FOR basis. This will need to be specifically verified to come to a conclusion on the basis of the documents for the period covered in the impugned order. Chartered Accountants certificates stand produced before the Commissioner (Appeals) certifying that the cement has been sold by the appellant on FOR basis. However in the impugned order there are no findings on such certificates.
9. I consider it to be necessary to remand the issue to the Commissioner (Appeals) with the direction to examine the certificates produced by the appellant and to arrive at a finding on the question of fact whether the clearances made during the period under dispute have been made under FOR destination basis. I also direct that in such cases the benefit of Cenvat credit would be allowable to the appellant on the basis of the majority of the High Court decisions.
10. In view of the above, I set aside the impugned order and remand for de novo decision.
(Dictated & pronounced in open Court) (V. Padmanabhan) Member (Technical) RM 1