Case Law Details
Sanghi Industries Ltd Vs C.C.E. (CESTAT Ahmedabad)
The present appeal is directed against the impugned order dated 15- 11-2019 passed by the Commissioner (Appeals) whereby the Commissioner (Appeals) has rejected the appeal of the appellant.
2. Briefly the facts of the case are that the appellant are manufacturers of Cement. On the basis of information called from the Appellant, it was observed that the Appellant had availed the Cenvat Credit of Service tax paid on outward GTA services used for transportation of their finished goods from their factory to customer’s premises i.e. beyond the place of removal, during the period from October 2015 to September 2016, which is alleged to be not proper in view of definition of “input service” as given at Rule 2(l) of the Cenvat Credit Rules, 2004. It appeared that any service availed after clearance of finished goods beyond the place of removal is not an input service and therefore, the appellant are not eligible to avail cenvat credit of service tax paid on outward GTA service. Show Cause Notices were issued to the appellant for recovery of wrongly availed cenvat credit totally amounting to Rs. 2,67,40,513/- along with interest, under Rule 14 of the Cenvat Credit Rules, 2004 and proposing imposition of penalty under Rule 15 ibid. The said show cause notices were adjudicated by the adjudicating authority vide Order-In-Original dated 26.11.2018 who dropped the proceedings. Aggrieved by the said order, revenue filed appeal before the Commissioner (Appeals) who after considering the submissions of the parties vide impugned order-in-appeal dated 14.11.2019allowed the appeal of revenue and hence the present appeal.
3. Shri. Jigar Shah, Learned Counsel appearing for the appellant submits that issue is settled in favour of the Appellant in their own case vide judgment of this Hon‟ble Tribunal reported at M/s Sanghi Industries Ltd. Vs. CCE, Kutch- 2019 (2) TMI -1488- CESTAT, Ahmedabad. The Appeal filed by the revenue against the said judgment has been dismissed and the issue is decided in favour of appellant vide dated 23.0 1.2020 passed by the Hon‟ble Gujarat High Court. Thus the issue is squarely covered in favour of the appellant, hence, the impugned order deserves to be set aside.
3.1 He submits that price charged by the Appellant from the customers is inclusive of freight charges for transportation of final products from factory/ depot to customer’s premises. Appellant are paying central excise duty at specific rate on ad-valorem on MRP basis. Therefore, the value of the transportation is included in the value of the final products. Hence, if the Cenvat Credit of Service tax paid on the transportation is not allowed it would lead to double taxation. He placed reliance on the following decisions.
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