Gujarat High Court
Principal Commissioner Central Excise ... vs Panasonic Battery India ... on 9 December, 2015
Author: Akil Kureshi
Bench: Akil Kureshi, Mohinder Pal
O/TAXAP/716/2015 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 716 of 2015
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PRINCIPAL COMMISSIONER CENTRAL EXCISE AND CUSTOMS
VADODARA-2....Appellant(s)
Versus
PANASONIC BATTERY INDIA CO.LTD.....Opponent(s)
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Appearance:
MR RJ OZA, ADVOCATE for the Appellant(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE MOHINDER PAL
Date : 09/12/2015
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. Revenue has challenged the order passed by the CESTAT dated 13.2.2015. The following question has been raised for our consideration:
"b. Whether on the facts and circumstances of the case, the CESTAT is justified in allowing the Cenvat credit availed by the respondent in respect of service tax paid on Goods Transport Agency Service in respect of outward transportation of the goods beyond the place of removal? "
2. The issue pertains to Cenvat credit on outward goods transportation agency service availed by the assessee for transportation of manufactured goods. This issue is covered by the judgment of Division Bench of this Court in case of Commissioner of Central Excise & Customs v. Parth Poly Wooven Pvt. Ltd. Reported Page 1 of 4 HC-NIC Page 1 of 4 Created On Fri Dec 11 01:43:52 IST 2015 O/TAXAP/716/2015 ORDER in 2012 (25) S.T.R. 4, in which the following observations have been made:
19. When we hold that outward transportation would be an input service as covered in the expression 'means' part of the definition, it would be difficult to exclude such service on the basis of any interpretation that may be offered of the later portion of the definition which is couched in the expression 'includes'. As already observed, it is held in several decisions that the expression 'includes' cannot be used to oust any activity from the main body of the definition if it is otherwise covered by the expression 'means'. In other words, the expression 'includes' followed by 'means' in any definition is generally understood to be expanding the definition of the term to make it exhaustive, but in no manner can the expression 'includes' be utilized to limit the scope of definition provided in the main body of the definition. To our mind this was also not the intention of the Legislature in the present case.
20. There, of course, are certain areas which still remain to be cleared. It was vehemently contended before us by the counsel for the Revenue that later portion of the definition which provides for the inclusion clause limits the outward transportation service up to the place of removal That being so, according to them, the outward transport service utilized by the manufacturer beyond the place of removal would not qualify as an input service within the definition of rule 2(l). We may only notice two things in this regard. Firstly, in our view, when we find that outward transport service is covered by the main body of the definition which provides for means part, as specifically including any service directly or indirectly in or in relation to manufacture of final product or clearance of final product from the place of removal, no interpretation of the later part of the definition would permit us to exclude such a service form the sweep of the definition. Secondly, we notice that the definition of the term 'input service' came to be amended with effect from 1.4.08 and instead of words "clearance of final products from the place of Page 2 of 4 HC-NIC Page 2 of 4 Created On Fri Dec 11 01:43:52 IST 2015 O/TAXAP/716/2015 ORDER removal", the words "clearance of final products upto the place of removal" came to be substituted. What would be the position if the case had arisen after 1.4.08 is a situation we are not confronted with. We, therefore, refrain from making any observations in this regard. We, however, cannot help noticing the change in the statutory provisions which is at the heart of the entire controversy. In so far as the cases on hand are concerned, the statutory provisions cover the service used by the manufacturer in relation to the manufacture of the final products or even the clearance of final products from the place of removal.
21. We must, however, for our curiosity reconcile the expression "from the place of removal" occurring in the earlier part of the definition with words 'upto the place of removal" used in inclusive part of the definition. Counsel for the assessees submitted that when a manufacturer transports his finished products from the factory without clearance to any other place, such as godown, warehouse etc. from where it would be ultimately removed, such service is covered in the expression 'outward transportation up to the place of removal" since such place other than factory gate would be the place of removal. We do appreciate that this could be one of the areas of the application of the expression 'outward transportation upto the place of removal'. We are unable to see whether this could be the sole reason for using such expression by the Legislature.
22. Be that as it may, we are of the opinion that the outward transport service used by the manufactures for transportation of finished goods from the place of removal upto the premises of the purchaser is covered within the definition of "input service" provided in rule 2(l) of the Cenvat Credit Rules, 2004.
This Tax Appeal is, therefore, dismissed.
(AKIL KURESHI, J.)
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O/TAXAP/716/2015 ORDER
(MOHINDER PAL, J.)
KMGThilake)
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