Custom, Excise & Service Tax Tribunal
Hawkins Cookers Ltd vs Cce Mumbai Iii on 19 September, 2017
IN THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
Appeal No.
E/85268/16
(Arising out Order-in- Appeal No. CD/739/M-III/15 dated 19.10.2015 passed by the Commissioner of Central Excise (A), Mumbai II)
For approval and signature:
Honble Shri Raju, Member (Technical)
1. Whether Press Reporters may be allowed to see No
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 No CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy Seen
of the Order?
4. Whether Order is to be circulated to the Departmental Yes
authorities?
Hawkins Cookers Ltd.
Appellant
Vs.
CCE Mumbai III
Respondent
Appearance:
Shri Prasad Paranjape, Advocate for the appellant Shri H.M. Dixit, (AR) for the respondent CORAM:
Honble Shri Raju, Member (Technical) Date of hearing : 08.09.2017 Date of decision : 19.09.2017 O R D E R No: ..
Per: Raju The appellants Hawkins Cookers Ltd. are in appeal against denial of cenvat credit on GTA services used for supplying goods to their own depots.
2. Ld. Counsel for the appellant argued that the appellants are manufacturing goods which are assessed on MRP basis assessment. The goods are manufactured in the plant in Thane and thereafter sent to their various depots located all over the country. The transporter engaged for taking the goods to the depot has a godown in Bhiwandi. The transporter takes the goods to Bhiwandi and thereafter the goods are despatched to various depots of the appellant. Revenue has denied credit on input services of transportation used by the appellant for despatch of goods from the godown of transporter to the appellants depot located at various places. Credit is sought to be denied on the presumption that the factory gate is place of removal and not the depot. Ld. Counsel argues that since the goods are sold for the first time by the appellants at their depot, the depot becomes the place of removal. He relied on the decision of Hon'ble High Court of Chhattisgarh in Ultra Tech Cement Ltd. 2014 (307) ELT 3 (Chhattisgarh) wherein the Hon'ble High Court has observed as follows:-
23.?Rule 2 of the Rules is definition clause. Sub-rule (l) of Rule 2 [2(l)] of the Rules defines input service. It is as follows :
(l) input service means any service,-
(i)?used by a provider of [output] service for providing an output service; or
(ii)?used by a 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 modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises; advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control; coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal;
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 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.
Ld. Counsel argued that in view of the said decision, no presumption could be made regarding the place of removal being factory gate.
3. Ld. Counsel argued that they are selling the goods from depot and not from the factory gate. He pointed out the invoice issued by them for clearance of goods from the factory gate are addressed to their own depots and thus it establishes that there is no sale taking place at factory gate. He further argues that the transporters' documents clearly show that the sale document is also addressed to their depot and not to the godown of the transporter. Thus when the goods leave the factory gate the transporter is required to carry it all the way to the depot. If the transporter tranships the goods to the godown the same may be for logistic reasons, the credit of GTA service availed for transporting the goods to the factory gate to the depot cannot be denied. Ld. Counsel also relied on the decision in case of M.P. Biscuits Pvt. Ltd. 2012 (282) ELT 563.
4. Ld. AR relies on the impugned order.
5. I have gone through the rival submission.
6. I find that in the proceedings of the revenue there is a presumption that the factory gate is the place of removal. Hon'ble High Court of Chhattisgarh in the case of Ultra Tech Cement Ltd. (supra) has observed that no such presumption can be made and the place of removal has to be decided on the basis of facts of each case. In this regard, para 23 to para 28 have been reproduced above. The Tribunal in M.P. Biscuits Pvt. Ltd. has in similar circumstances held that credit of input service of GTA can be allowed for removal up to the depot of the principal manufacturer in respect of M.P. Biscuits Pvt. Ltd. which are also assessed on the basis of MRP under Section 4A. In para 10 and 11, following has been observed:-
10.?Input service is defined under Rule [2(l)(ii)] of Cenvat Credit Rules, 2004 which reads thus :-
(ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal,
11.?Reading of above provision clearly show that outward transportation of the manufactured product up to the place of removal falls within the definition of input service. The appellant has placed on record the authorization letter dated 15-3-2005 addressed by PBPL to Assistant/Deputy Commissioner, Central Excise, Varanasi authorising the appellant to manufacture biscuit on their behalf. Further perusal of the terms and conditions mutually agreed upon between PBPL and the appellant would show that as per the job work contract the appellant were required to process and manufacture biscuit, carry out inspection, packing and delivery to various depots of PBPL located all over the country as directed by PBPL. From the above stipulation in the contract, appellants were under obligation to transport biscuits to various depots of PBPL as such obviously the place of removal was/were depots where the appellant was required to supply manufactured biscuit as per direction of the appellant. Admittedly, the appellants have transported the goods to the depots/premises of the principal manufacturer and paid transportation charges including the Service tax. In this regard, the appellant have placed on record photocopies of Form TR-6 for payment of Service tax in respect of the period in question. Thus, it is apparent that the appellant has paid Service tax in respect of the input service i.e. the outward transportation of the biscuits to the place of removal. As such, in view of Rule 3 of Cenvat Credit Rules the appellant has rightly availed Cenvat credit.
7. It is also seen that at the time of clearance from the factory, the documents clearly indicate that the goods are intended for supply to their own depot and there is no sale involved. Taking all these facts into account, I am of the view that the place of removal in these circumstances will be depot and the credit of GTA service upto the depot of the appellant would be available irrespective of the fact that the said goods are trans-shipped at Bhiwandi or otherwise.
8. Consequently, the appeal is allowed.
(Pronounced in Court on ..............................) (Raju) Member (Technical) //SR
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