Century Rayon Ltd. (A. Div. Of Century ... vs Commissioner Of Central Excise, ...

[Arising out of Orders-in- Appeal Nos. VSK/54 to 56/Th-I/2010 dated 12/3/2010, SB/80/Th-I/2011 dated 24/2/2011, YDB/165//KALYAN-II DN/2011 dated 11/7/2011 passed by the Commissioner(Appeals) Central Excise, Mumbai Zone I]

For approval and signature:

Honble Mr Ramesh Nair, Member(Judicial)

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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : seen of the Order?

4. Whether Order is to be circulated to the Departmental: Yes authorities? =======================================================

Century Rayon Ltd. (A. Div. of Century Text & Ind. Ltd) : Appellants

VS

Commissioner of Central Excise, Thane-I : Respondent

Appearance

Shri. Mihir Mehta, Advocate for the Appellants

Shri. H.M. Dixit, Asst. Commissioner(A.R.) and N.N. Prabhudesai, Superintendent(A.R) for the Respondent

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 29/5/2015 Date of decision: 29/5/2015

ORDER NO.

Per : Ramesh Nair

These appeals are directed against Orders-in- Appeal Nos. VSK/54 to 56/Th-I/2010 dated 12/3/2010, SB/80/Th-I/2011 dated 24/2/2011, YDB/165//KALYAN-II DN/2011 dated 11/7/2011 passed by the Commissioner(Appeals) Central Excise, Mumbai Zone I, wherein Ld. Commissioner upholding the demand of Cenvat credit, rejected the appeals of the appellant.

2. The issue involved in all the appeals is admissibility of Cenvat Credit in respect on GTA service i.e. transportation of empty container from container yard to the factory of the appellant and thereafter transportation of container from the factory to the port. Show cause notices were issued proposing denial of the Cenvat Credit on the ground that outward transportation is covered by the definition of terms input services which are allowed only up to place of removal of final product. In the present case outward transportation beyond the place of removal i.e. factory gate is not covered under the definition of input service. Show cause notices were confirmed by way of adjudication order wherein demand of Cenvat Credit was confirmed and penalty and interest were demanded. Aggrieved by the said orders appellant filed appeal before the Commissioner (Appeals) who upheld the demand and rejected the appeals.

3. Shri. Mihir Mehta, Ld Counsel for the appellant submits that very same issue in their own case has been decided by this Tribunal vide final order No. A/19/12/SMB/C-IV dated 9/3/2012 wherein Cenvat credit in respect of transportation of container from yard to factory as empty container from factory to the port of export as stuffed container has been allowed. He further submits that Ld. Commissioner (Appeals) has gone beyond the scope of the show cause notice for the reason that only allegation in the show cause is that the GTA service is not being outward transportation beyond place of removal therefore it is not covered by the definition of input service has provided under Rule 2(l) of Cenvat Credit Rules, 2004. Therefore the only issue to be considered whether the GTA service in question falls within the purview of definition of input service. He also submits that Ld. Commissioner (Appeals) disputed regarding the documentation and invoices of GTA whereas show cause notice itself has given details of invoices and amount of Cenvat Credit which is absolutely taken from the invoices of GTA therefore the findings of the Commissioner(Appeals) should be ignored and issue may be decided only on merit which was raised in the show cause notice.

4. Shri. H.M. Dixit, Ld. Asstt. Commissioner (A.R.) reiterates the findings of the impugned order. He further submits that the appellant have taken Cenvat Credit in respect of GTA for clearance of their goods in the container from the factory to port of export, which is covered under outward transportation and as per the definition, the outward transportation credit is allowed only for transportation upto the place of removal. In the present case place of removal is the factory therefore transportation service from factory to port of export is not admissible being not covered under the definition of input service.

5. I have carefully considered the submissions made by both sides and perused the record.

6. The fact that the service of GTA is in respect of transportation of empty container from container yard to the factory and from factory to port of export towards stuff container has not been under dispute. The Cenvat credit was denied on the ground that since it is outward transportation beyond the place of removal ie. factory gate therefore it is not covered under the definition of input service. Firstly, there is no dispute that the entire transportation in respect of export goods. It is settled in the catena of judgments and also now in the Board circular when the transportation is of export goods, the place of removal stand extended to the port of export, therefore it is clearly covered by the definition of input service as applicable at the relevant time wherein transportation up to the place of removal was explicitly included in the definition of input service. Therefore in my considered view, in the present case GTA service for transportation of export goods is input service and Cenvat credit is legally admissible. I have gone through the judgments of coordinate bench of this Tribunal in their own case passed by order dated 9/3/2012 and find that exactly the similar issue was involved wherein Honble Tribunal allowed the cenvat credit, findings of the Tribunal order is reproduced below:

7. As regard the credit of the Service Tax paid on freight for empty containers for bringing containers from yard to the factory, the issue has been settled by the Tribunal in the case of Nitin Spinners Ltd. (Supra) holding that Service Tax paid on freight for empty containers called for export of the goods is admissible. Therefore, in view of the above decision the appellant is also entitled for availment of Cenvat Credit in respect of freight charges paid by the appellant for bringing in the empty containers. As regard paying the transportation of goods in containers form the factory to the port of export, these charges are in relation to the transport of export goods. Notification No. 18/2009-ST dated 7/7/2009, exempted the taxable service received by an exporter in respect of the transport of goods from place of removal to port of export. Since the tax is exempted on these transportation charges, if tax has been paid by the appellant to department, credit of the same will be available to the exporter particularly when the value in respect of the goods is FOB basis which includes all expenses up to the port of export goods. Therefore, appellant is entitled to avail credit of Service Tax in respect of these charges also. Since amount credit is admissible to the appellant for bringing empty containers to factory and thereafter transporting the loaded containers to the port of export, mere not splitting of these charges separately will not disentitle them for Cenvat Credit.

8. Appeal is allowed.

From the above findings of this Tribunal in the appellants own case, the issue disputed in the present case has been settled, accordingly appellant is entitled for the Cenvat Credit in respect of GTA used for transportation of export goods as well as for bringing empty container to their factory. I therefore set aside the orders-in-appeal and allow the appeals of the appellant.

(Dictated in court)

Ramesh Nair Member (Judicial) sk

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