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Appearance Shri Jatin Mahajan, Advocate  for the appellant.

Shri Yashpal Sharma, Authorized Representative (DR)  for the Respondent.

CORAM : Honble Shri Justice G. Raghuram, President Honble Shri Rakesh Kumar, Member (Technical) Final Order No. 52197/2014 Dated : 21/04/2014 Per. Rakesh Kumar :-

The appellant are a manufacturer of biscuits chargeable to Central Excise duty. The period of dispute in this case is from November 2009 to October 2011. During this period, they were manufacturing biscuits on job work basis for M/s Parle Biscuits Products Pvt. Ltd. out of the raw material supplied by them. In terms of the appellants contract with M/s Parle Biscuits, the biscuits manufactured by them were being delivered at their depots from where the same were being sold. During the period of dispute, the biscuits were notified under Section 4A of the Central Excise Act, 1944 and accordingly the duty on the biscuits cleared by the appellant was being paid on the basis of the assessable value determined with reference to declared MRP i.e. MRP minus abatement. The point of dispute in this case is as to whether the appellant would be eligible for Cenvat credit of service tax paid on the GTA service availed for transportation of the biscuits from their factory to the depot of M/s Parle Biscuits. The original Adjudicating Authority denied the credit and confirmed the Cenvat credit demand of Rs. 65,420/- alongwith interest and imposed penalty of same amount on them under Rule 15 of Cenvat Credit Rules, 2004. On appeal being filed against order of the original Adjudicating Authority, the Commissioner (Appeals) vide order-in-appeal dated 26/12/12 dismissed the appeal. Against this order of the Commissioner (Appeals), the appellant have filed this appeal alongwith stay application.

2. Heard both the sides.

3. Though today the matter was listed only for hearing of the stay application, since only a short issue is involved, the Bench of the view that the matter can be taken up for final disposal. Accordingly, with the consent of both the sides, the requirement of pre-deposit is waived and this appeal is heard for final disposal.

4. Shri Jatin Mahajan, Advocate, the learned Counsel for the appellants, pleaded that since the biscuits after being cleared from the appellants factory were transported by the appellant to the depots of M/s Parle Biscuits from where the same were being sold, it is the depot which will be the place of removal, that during the period of dispute, the definition of input service included the transportation of finished goods upto the place of removal, that in terms of Rule 2 (t) of the Cenvat Credit Rules, 2004, meaning of the terms which are not defined in the Cenvat Credit Rules, 2004, has to be adopted from the definition of those terms in the Central Excise Act, 1944 or the Rules made thereunder, that in terms of the provisions of Section 4 (3) (c) of the Central Excise Act, 1944 during the period of dispute, when the goods are cleared by a manufacturer to his depot for sale, it is the depot which is the place of removal, and that in view of this, the appellant would be eligible for Cenvat credit of service tax paid on the GTA service availed for transportation of the biscuits up to the depots of M/s Parle Biscuits. He also cited the judgment of the Tribunal in the case of M.P. Biscuits Pvt. Ltd. vs. CCE, Allahabad involving same facts and same issue, wherein the Tribunal vide order reported in 2012 (282) E.L.T. 563 (Tri.  Del.) has held that the assessee would be eligible for Cenvat credit of service tax paid on the GTA service availed for transportation of the biscuits from his factory to the depot of M/s Parle Biscuits. He, therefore, pleaded that the impugned order is not correct.

7. We have considered the submissions from both the sides and perused the records.

8. The undisputed facts are that the appellant manufactured biscuits on job work basis out of the raw material supplied by M/s Parle Biscuits and arrange the transportation of the biscuits to the depots of M/s Parle Biscuits in terms of the appellants contract with them. There is also no dispute that biscuits are notified under Section 4A and accordingly the duty on the biscuits was being paid on the assessable value determined under Section 4A with reference to MRP i.e. the MRP minus abatement. The point of dispute is as to whether the appellant would be eligible for Cenvat credit of service tax paid on the GTA service availed for transportation of the biscuits from their factory to the depot of M/s Parle Biscuits. The Commissioner (Appeals) has upheld the denial of Cenvat credit on the ground that this is not the case where the clearance was on sale and the sale of goods was on FOR destination basis and transfer of ownership had been taken place at the customers premises and accordingly she has held that the place of removal would be the factory gate and the same cannot be extended to the depot of M/s Parle Biscuits. We agree with the conclusion of the Commissioner (Appeals), as firstly in view of the Tribunals judgment in the case of Ultratech Cement Ltd. vs. CCE, Chandigarh/Raipur (supra), since in this case the assessable value of the goods was being determined not under Section 4 but under Section 4A of the Central Excise Act, 1944, the definition of place of removal as given in Section 4 (3) (c) cannot be adopted for the purpose of Cenvat Credit Rules, 2004 and accordingly it is the factory gate which would be the place of removal. Moreover, even if the definition of place of removal as given in Section 4 (3) (c) is treated as applicable to the cases where the duty on the finished goods is payable on the value determined under Section 4A, even then, the depot of M/s Parle Biscuits cannot be treated as place of removal in respect of the goods manufactured by the appellant, as the place of removal defined in Section 4 (3) (c) is the place of removal for the manufacturer of the goods and in case, the manufacturer after clearing the goods from the factory to his depots sells the goods from those depots, it is those depots which would be the place of removal. However, when the manufacturer clears the goods to the depots of some other persons, those depots cannot be treated as place of removal for the manufacturer, unless the sales are on FOR destination basis. For this reason also, the place of removal in this case is factory gate of the appellant, and not the depot of M/s Parle Biscuits. In view of this, we hold that the Cenvat credit of the service tax paid on the GTA services availed for transportation of goods from the factory of the appellant to the depot of M/s Parle Biscuits has been correctly denied and, as such, the Cenvat credit demand has been correctly upheld alongwith interest.