Custom, Excise & Service Tax Tribunal
Forech India Private Ltd vs Commissioner Of Central Excise on 25 November, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No.E/41505/2016
[Arising out of Order-in-Appeal No.152/2016 (CXA-II) dt. 18.4.2016 passed by the Commissioner of Central Excise (Appeals-II), Chennai]
Forech India Private Ltd.
Appellant
Versus
Commissioner of Central Excise,
Puducherry Respondent
Appearance:
Shri Rohan Muralidharan, Advocate For the Appellant Shri A. Cletus, ADC (AR) For the Respondent CORAM:
Honble Shri Madhu Mohan Damodhar, Member (Technical) Date of hearing/decision : 25.11.2016 FINAL ORDER No.42338/2016 Two issues are involved in this dispute. The first issue relates to availment of input service credit of Rs.15,45,000/- by appellant based on invoices issued by M/s.Forech India Ltd. in their capacity as holder of centralized registration obtained by them. Department has taken a view that such centralized registration cannot be equated with the ISD registration in terms of Rule 2 (m) of and Rule 7 of Cenvat Credit Rules 2004 read with Rule 4A (2) of Service Tax Rules, 1944.
2. The second issue concerns availment of cenvat credit of Rs.4,80,203/- on the service tax paid on outward freight during the period from 1.8.2001 to 27.3.2012, where the department took the view that GTA, outward transportation, upto the place of removal was not eligible for cenvat credit. Show Cause Notice proposing recovery of these amounts was affirmed by original authority and upheld by lower appellate authority. Hence this appeal.
3. Today when the matter came up for hearing, Shri Rohan Muralidharan, Ld. Advocate submitted that the issue in respect of distribution of credit without registration as ISD is only procedural shortcoming and will not disentitle availment of cenvat credit. He relies upon the ratio of decision of Honble High Court of Gujarat in the case of CCE Vs Dashion Ltd. 2016 (41) STR 884 (Guj.) and by the Honble High Court of Rajasthan in the case of CCE Jaipur Vs National Engineering Industries Ltd. 2016-TIOL-922-HC-RAJ.-CX.
3.1 In respect of the second issue concerning availment of cenvat credit on outward freight, learned advocate submitted that although the show cause notice and proceedings thereto as well as in their own submissions during the adjudication proceedings, it was presumed that the disputed transportation services were only that related to removal upto customers premises, however, they have now realized that such transportation services were also for transportation upto depots and to job worker. For these reasons, he submitted that with regard to this dispute, the matter may be remanded back to original authority for de novo consideration.
4. On the other hand, Shri A. Cletus, ADC, Ld. A.R reiterated the correctness of the finding of the impugned order. However, he has no objection to remanding the second issue back to original authority. Ld.A.R also pointed out that in the invoices issued by appellant, the name and address of the service recipient is not mentioned.
5. Heard both sides. The issue of distribution of credit without registration as ISD, particularly before 1.7.2012 when Rule 7 of the Rules was amended, has been considered in a number of decisions of higher appellate forums, including the one correctly relied upon by learned advocate. Ratio of all these decisions is that such non-registration as ISD is only a procedural irregularity, nonetheless, it is a curable defect. Hence availment of distribution of credit cannot be denied based on interpretation of law. This Bench has also taken identical view in a number of cases, for example, Murugappa Morgan Thermal Ceramics Ltd. Vs CCE - 2016-TIOL-1845-CESTAT-MAD-CX. This being the case, I intend to follow the same view in this matter and set aside that part of the impugned order denying input service credit of Rs.15,45,000/- availed by them in respect of invoices issued by M/s.Forech India Ltd.
6. In respect of the second dispute involving credit on outward transportation, in view of the submissions of learned advocate and also with the consent of both sides, the matter is being remanded to original authority for de novo consideration to decide the issue in the light of statutory provisions as also as per the ratio of judgement and decisions of higher appellate forums with regard to eligibility of such credits availed on outward transportation. Adjudicating authority shall give sufficient opportunity to appellant to produce all the documents and evidence in support of their case and pass a reasoned order.
7. Appeal is allowed in the above terms.
(Dictated and pronounced in open court) (MADHU MOHAN DAMODHAR) MEMBER (TECHNICAL) gs 5