M/S. Shankar Packagings Limited vs Commissioner Of Central Excise & S.T., ...

(Arising out of OIA-COMMR-A-/29/VDR-II/2008 dated 21.02.2008, passed by Commissioner (Appeals) Central Excise, & S.T., Vadodara)

M/s. Shankar Packagings Limited : Appellant (s)

VERSUS

Commissioner of Central Excise & S.T., Vadodara : Respondent (s)

Represented by :

For Appellant (s) : Ms. Harpinder Sandhu, Advocate For Respondent (s) : Shri Govind Jha, Authorised Representative

For approval and signature :

Mr. H.K. Thakur, Honble Member (Technical)

1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether their Lordships wish to see the fair copy of the Order?

Seen 4 Whether Order is to be circulated to the Departmental authorities?

Yes

CORAM :

Mr. H.K. Thakur, Honble Member (Technical)

Date of Hearing / Decision : 10.08.2015

ORDER No. A/11186/2015 Dated 10.08.2015

Per : Mr. H.K. Thakur;

This appeal has been filed by the appellant against OIA No. Commr(A)/29/VDR-II/2008 dated 21.02.2008 issued on 10.03.2008 under which Cenvat Credit of Rs. 3,56,608/- has been disallowed and Service Tax demand of Rs. 2,74,629/- has been confirmed against the appellant, along with interest and imposition of penalties.

2. Ms. Harpinder Saudhu (Advocate) appearing on behalf of the appellant argued that demands have been confirmed against the appellant on the following two counts:-

(i) That appellant is not entitled to debit duty of Rs. 2,74,629/- of GTA Service from the Cenvat Credit Account.

(ii) That Cenvat Credit of Rs. 3,56,608/- has been disallowed to the appellant on the ground that Cenvat Credit of freight services availed from the factory to the port of export is not admissible.

2.1 With respect to point mentioned at Para-2(i) above is concerned, learned Advocate relied upon the case law of CCE & Cus. vs. Panchmahal Steel Limited - [2015 (37) STR 965 (Guj.)] to argue that the debit of GTA service tax was correctly paid from Cenvat Credit account.

2.2. Regarding Cenvat Credit on freight services from factory to Port of Export, she relied upon the following case laws:-

(i) Modern Petro Film vs. CCE, Vadodara - [2010 (18) STR 625 (Tri.-Ahmd)].

(ii) Commissioner vs. Dynamic Industries Limited - [2014 (307) ELT 15 (Guj.)]

3. Shri Govind Jha (AR) appearing on behalf of the Revenue defended the order passed by the first appellate authority. He relied upon the case law of M/s Market Systems vs. CCE and ST, Vadodara-II [2014 (3) ECE (170) (Tri.-Ahmd)].

4. Heard both sides and perused the case records. The two issues involved in this appeal are admissibility Cenvat Credit on freight services availed by the appellant from the factory gate to the port of export and debiting of service tax of GTA services under reverse charge mechanism, from the Cenvat Credit maintained by the appellant. On the issue of payment of GTA services from the Credit accounts, Hon'ble Gujarat High Court in the case, of Commissioner of Central Excise & ST vs. Panchmahal Steel Limited (supra), held it to be admissible as per Para  8 reproduced below:-

8?Rule 3 of the Cenvat Credit Rules, 2004 pertains to Cenvat credit. Sub-rule (1) thereof allows the manufacturer or purchaser of final products or provider of output service to take credit of Cenvat of various duties specified therein. Sub-rule (4) of Rule 3 of the said Rules provides that the Cenvat credit may be utilized for payment of various duties specified in clauses (a) to (e) thereof; clause (e) pertains to Service Tax on any output service. A combined reading of these statutory provisions would, therefore, establish that though the assessee was liable to pay Service Tax on G.T.A. Service, it could have utilized Cenvat credit for the purpose of paying such duty. In view of the decisions of Punjab and Haryana High Court and Delhi High Court noted above, we do not find any error in the view of the Tribunal. Tax Appeal is, therefore, dismissed.

4.1. Regarding the issue of admissibility of Cenvat Credit it has been held by Gujarat High Court in the case of Commissioner vs. Dynamic Industries Limited (Supra) that point of export is the place of removal in case of exported goods. Reliance placed by the Learned (AR) in the case of M/s Market Systems vs. CCE and ST, Vadodara-II (Supra) is not of any help to the Revenue as the same was passed by this bench when the benefit of law laid down by Gujarat High Court in the case of Commissioner vs. Dynamic Industries Limited (Supra) was not available.

5. In view of the above settled proposition of law, appeal filed by the appellant is allowed on both accounts.

(Order dictated and pronounced in the Court)

(H.K. Thakur) Member (Technical) .KL

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