1. The issue in all these appeals being same, they were heard together and are disposed by this common order.
2. Brief facts are that the appellants are manufacturers of radiators and parts and are availing the facility of CENVAT credit of duty paid on inputs and service tax paid for input services. On verification of records, it was noticed that during the periods September 2009 to February, 2010 and October 2014 to April 2015, May 2015 to February 2016, the appellant had availed CENVAT credit on outward transportation of goods for the goods cleared from their factory gate to their own units at Jamshedpur and Uttarakhand on stock transfer basis. Show cause notices were issued proposing to disallow the credit and for recovery of the CENVAT credit along with interest and for imposing penalties. After due process of law, the original authority confirmed the duty demands and imposed penalties. In appeal, Commissioner (Appeals) upheld the same. Aggrieved, the appellants are now before this Tribunal.
3. On behalf of the appellant, ld. counsel Shri Ashwin Kumar submitted that the appellant in the present cases are contesting the issue of disallowance of credit on GTA services for outward transportation of goods which were stock transferred to their own factory which is a manufacturing unit located at Jamshedpur and Uttarakhand. He referred to Se
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ction 4(3)(c) of the Central Excise Act, 1944 and submitted that the 'place of removal' is defined as a factory or any other place or premises of production or manufacture of the excisable goods. In terms of Rule 2(qa) of CENVAT Credit Rules, 2004 also the 'place of removal' means a factory or any other place or premises of production or manufacture of the excisable goods. The place of removal is required to be determined with reference to 'point of sale'. In the case of stock transfer, the entire goods are transferred to the other manufacturing unit of the appellant and therefore at the factory gate no sale takes place. Thus, in the case when the goods are stock transferred to their own unit for further manufacture, the place of removal cannot be considered as the factory gate. Only if there is a sale, the said point can be considered as a place of removal. To support his argument, he relied upon the judgment of the Hon'ble Supreme Court in the case of Commissioner Vs. Roofit Industries Ltd. - 2015 (319) ELT 221 (SC). The Board Circular No. 1065/4/2018-CX dated 8.6.2018 was also relied by the ld. counsel for the appellant. He further took assistance of the decision of the Tribunal in the case of Commissioner of Central Excise Vs. Lafarge India Pvt. Ltd. - 2017 (52) STR 350 (Tri. Del.) and Cadbury India Ltd. - 2016 (42) STR 155.
4. The ld. AR Shri S. Govindarajan supported the findings in the impugned order. He relied upon the judgment in the case of Commissioner of Central Excise Vs. Ultratech Ltd. - 2018 (9) GSTL 337 (SC). He argued that in the said case, the Hon'ble Apex Court had held that the credit availed on GTA services upto the buyers' premises after 1.4.2008 is not eligible.
5. Heard both sides.
6. For better appreciation, the relevant provisions of law are reproduced as under:-
"Place of removal" means-
(i) a factory or any other place or premises of production or manufacture of the excisable goods;
(ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without [payment of duty;]
[(iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory;]
from where such goods are removed".
Input services after 1.4.2008
"Input service" means,-
(i) services provided or agreed to be provided by a person located in non-taxable territory to a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India where service tax is paid by the manufacturer or the provider of output service being importer of goods as the person liable for paying service tax for the said taxable services and the said imported goods are his inputs or capital goods; or
(ii) any service used by a provider of output service for providing an output service; or
(iii) any service 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 modernisation, 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.
[(A) service portion in the execution of a works contract and construction services including service listed under clause (b) of section 66E of the Finance Act (hereinafter referred as specified services) in so far as they are used for -
(a) construction or execution of works contract of a building or a civil structure or a part thereof; or
(b) laying of foundation or making of structures for support of capital goods,
except for the provision of one or more of the specified services; or]
[(B) [services provided by way of renting of a motor vehicle], in so far as they relate to a motor vehicle which is not a capital goods"
7. With effect from 1.4.2008, in the definition of input services the words 'upto the place of removal' has been substituted instead of 'from the place of removal'. The ld. counsel has strenuously argued that since there is no sale of goods from the factory gate when the goods are stock transferred to their own unit for further manufacture, the factory gate cannot be considered as place of removal. According to him, Section 4(3)(c) of Central Excise Act, 1944, uses the word 'place of removal' as the place from where the goods are sold. In the appellant's case, the intermediate goods are removed on payment of excise duty on the basis of CAS-4 for further manufacture to their sister unit. It is thus argued that though goods are removed on payment of duty to their sister unit, it does not amount to sale as there cannot be any sale to oneself. Therefore, the GTA services used for transportation of goods to sister unit cannot be considered as beyond the place of removal but is rather used upto the place of removal since the sale of finished product to buyer happens at sister unit. The decision in the case of Cadbury India Ltd. (supra) was relied by the ld. counsel in this regard. On perusal of the facts of the said case, it is seen that the CENVAT credit on GTA was received for clearance of the job work and to their own unit on payment of duty. The relevant portion of the order is reproduced as under:-
"6. I find that both lower authorities have confirmed demand of Cenvat credit on GTA only on the ground that clearances to the job worker and their own unit made on payment of duty, for this reason it was contended that factory of the appellant is place of removal and credit cannot be allowed beyond the place of removal. I find that though the goods were cleared on payment of duty but it is admittedly not clearance for sale of the goods. In terms of Section 4(3)(c) of Central Excise Act, 1944, definition of place of removal is as under:
'Place of removal' means:-
(i) a factory or any other place or premises of production or manufacture of excisable goods;
(ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty;
(iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearances from their factory.
from where such goods are removed."
From the above definition, it is clear that where the goods is cleared from factory, but place of removal is determined only a place, where the goods is sold. In case goods is sold from factory, the factory gate is considered as place of removal but though the clearances is made from the factory but goods is not sold from factory, but sold at any other place after removal of goods from the factory, the said place from where the goods is sold shall be the 'place of removal'. In the instant case though the goods were cleared on payment of duty from the factory of the appellant but not sold from the factory. In case of job work goods the sale of the finished goods took place from the appellant factory and in case of removal of goods to their own other unit the sale took place from that other unit. Therefore, in the present case transportation (GTA) service is used up to the place of removal and hence qualified as input service. As per this clear position in law, I am of the view GTA in the present case being used up to the place of removal covered under the definition of input service and hence admissible for Cenvat credit. I therefore, set aside the impugned order and allow the appeal with consequential relief, if any, in accordance with law."
8. In Lafarge India Pvt. Ltd. (supra), the Tribunal referring to Roofit Industries Ltd. (supra), has observed that credit of service tax paid on transportation of clinker to their sister unit is admissible as there is no case of sale and transfer of property in goods at the factory gate. The relevant portion is as follows:-
"6. After careful consideration of the facts, the submissions of both the sides and the case laws cited, it appears that the facts do not involve any sale of the goods in question. The goods viz. clinker is to be transported from party's premises to their sister unit premises and the respondent viz. Lafarge India Pvt. Ltd. is not taking any consideration for the same as Jojobera unit being their sister unit. It is clear that the definition 'place of removal' is inextricably linked with the fact of 'sale'. When present facts do not involve any sale, one cannot say that the factory premises of the appellant is the 'place of removal'. Therefore, the Revenue's contention that Cenvat credit cannot be allowed on account of transportation services used for transportation of clinker transferred by respondent to their Jojobera unit is without sufficient force.
6.1 The Hon'ble Punjab & Haryana High Court in the case of Ambuja Cement (supra) has observed that if ownership of goods remain with seller Cenvat credit would be admissible. CESTAT, Mumbai in case of Metro Shoes P. Ltd. (supra) also holds that when there is no sale involved, services used till place of removal are eligible for credit. In the present case, 'place of removal' is to be treated as Jojobera unit of M/s. Lafarge India (P) Ltd."
9. However, the Hon'ble Apex Court in the case of Ultratech Ltd. (supra) had laid the law that after 1.4.2008 CENVAT credit on GTA service is not eligible from the factory to buyer's premises and eligible only upto the place of removal which is the factory gate. The relevant portion of the judgment is reproduced as under:-
"7 It may be relevant to point out here that the original definition of 'input service' contained in Rule 2(l) of the Rules, 2004 used the expression 'from the place of removal'. As per the said definition, service used by the manufacturer of clearance of final products 'from the place of removal' to the warehouse or customer's place etc., was exigible for Cenvat Credit. This stands finally decided in Civil Appeal No. 11710 of 2016 (Commissioner of Central Excise Belgaum v. M/s. Vasavadatta Cements Ltd.) vide judgment dated January 17, 2018. However, vide amendment carried out in the aforesaid Rules in the year 2008, which became effective from March 1, 2008, the word 'from' is replaced by the word 'upto'. Thus, it is only 'upto the place of removal' that service is treated as input service. This amendment has changed the entire scenario. The benefit which was admissible even beyond the place of removal now gets terminated at the place of removal and doors to the Cenvat credit of input tax paid gets closed at that place. This credit cannot travel therefrom. It becomes clear from the bare reading of this amended Rule, which applies to the period in question that the Goods Transport Agency service used for the purpose of outward transportation of goods, i.e. from the factory to customer's premises, is not covered within the ambit of Rule 2(l)(i) of Rules, 2004. Whereas the word 'from' is the indicator of starting point, the expression 'upto' signifies the terminating point, putting an end to the transport journey."
The decisions relied by the appellant were rendered prior to the judgment in the case of Ultratech Ltd. (supra) which was decided in Civil Appeal No. 11261 of 2016 decided on 1.2.2018.
10. Following the judgment of the Hon'ble Supreme Court, I am of the view that the credit is not eligible. The impugned orders do not call for any interference. The appeals are dismissed.