Madras High Court
Commissioner Of Central Excise ... vs M/S. The India Cements Ltd on 23 September, 2021
C.M.A.Nos.2244 to 2246 of 2012
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 23.09.2021
CORAM :
THE HON'BLE MR. JUSTICE T.S. SIVAGNANAM
AND
THE HON'BLE MR. JUSTICE SATHI KUMAR SUKUMARA KURUP
C.M.A.Nos.2244 to 2246 of 2012
Commissioner of Central Excise and Service Tax,
No.1, Williams Road, Cantonment,
Tiruchirappalli – 620 001. ... Appellant
in all appeals
Vs.
1.M/s. The India Cements Ltd.,
Dalavoi Works, Cement Nagar Post,
Senthurai Taluk – 621 730.
2.Customs, Excise and Service Tax
Appellate Tribunal, South Zonal Bench,
Shastri Bhavan Annexure,
No.26, Haddows Road,
Chennai – 600 006. ... Respondents
in C.M.A.No.2244 of 2012
1.M/s.Madras Cements Ltd.,
Alathiyur Works, Cement Nagar Post,
Perambalur District - 621 730.
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C.M.A.Nos.2244 to 2246 of 2012
2.Customs, Excise and Service Tax
Appellate Tribunal, South Zonal Bench,
Shastri Bhavan Annexure,
No.26, Haddows Road,
Chennai – 600 006. ... Respondents
in C.M.A.No.2245 of 2012
1.M/s. The India Cements Ltd.,
Dalavoi Works, Cement Nagar Post,
Senthurai Taluk – 621 730.
2.Customs, Excise and Service Tax
Appellate Tribunal, South Zonal Bench,
Shastri Bhavan Annexure,
No.26, Haddows Road,
Chennai – 600 006. ... Respondents
in C.M.A.No.2246 of 2012
Civil Miscellaneous Appeals in C.M.A.Nos.2244 to 2246 of 2012 filed
under Section 35G(2) of Central Excise Act, 1944, against the Final Order
Nos.864, 889 & 893 of 2011 dated 27.07.2011 (out of Common Final Order
No.859-976 of 2011 dated 27.07.2011), respectively, on the file of the
Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench,
Chennai.
For Appellant : Mrs.R.Hemalatha
Senior Standing Counsel
in all appeals
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C.M.A.Nos.2244 to 2246 of 2012
COMMON JUDGMENT
(Judgment was delivered by T.S. SIVAGNANAM, J.)
These appeals filed by the Revenue under Section 35G(2) of Central
Excise Act, 1944 ('the Act' for brevity), are directed against the Final Order
Nos.864, 889 & 893 of 2011, dated 27.07.2011, on the file of the Customs,
Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai.
2.These appeals have been admitted on 08.10.2012 on the following
substantial questions of law :
“1.Whether the Customs, Excise and Service
Tax Appellate Tribunal (CESTAT), Madras in the
Final Order No.859-976 of 2011 dated 27.07.2011
(Final Order Nos.859, 864, 889 and 893 of 2011
dated 27.07.2011 in these cases) was right in relying
upon the decision of the Karnataka High Court in
CCE & ST, LTU, Bangalore Vs. ABB Ltd [2011 (23)
STR 97 (Kar.)] holding that transportation charges
incurred by the manufacturer for clearance of final
product from place of removal, up to 01.04.2008
were included in the definition of “input service”,
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C.M.A.Nos.2244 to 2246 of 2012
especially in respect of the respondent?
2.Whether in view of the varying interpretation
of the term 'ínput service' in various decisions, the
CESTAT, Chennai was right interpreting the term in
the manner as in the order?”
3.Heard Mrs.R.Hemalatha, learned Senior Standing Counsel,
appearing for the appellant/Revenue.
4.We need not labour much to take a decision in these appeals, as
identical issue came up for consideration before the Hon'ble Division Bench
of this Court in the case of Commissioner of Central Excise and Service
Tax, Coimbatore v. Pricol Limited, Coimbatore and another
[C.M.A.No.1265 of 2012, dated 22.07.2019]. The Hon'ble Division Bench
took note of the fact that the Tribunal had followed the decision in the case of
CCE & ST, LTU, Bangalore v. ABB Limited reported in 2011 (23) STR 97
(Kar.) and held in favour of the assessee.
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C.M.A.Nos.2244 to 2246 of 2012
5.It was contended by the Revenue that the Hon'ble Supreme Court
has dealt with the issue in two other judgments, namely, CCE v.
Vasavadatta Cements Limited reported in 2018 (11) GSTL 3 (SC), dated
17.01.2018, and CCE v. Andhra Sugars reported in (2018) 10 GSTL 12
(SC), decided on 05.02.2018.
6.Noting the submissions and after extracting the relevant paragraphs
of the judgments, the Hon'ble Division Bench held that the matter has to go
back to the Tribunal to look into the factual aspects of the matter again with
respect to the applicability of the two decisions of the Hon'ble Supreme Court
and accordingly, the appeal filed by the Revenue was disposed of, remitting
the matter back to the Tribunal to decide the matter afresh in accordance with
law, after hearing both the parties on the applicability of the two judgments
of the Hon'ble Supreme Court. The judgment reads as follows :
“The Revenue has filed this Appeal aggrieved by the
order dated 27.07.2011 passed by the learned Tribunal
disposing of a batch of appeals on the issue, whether the
transportation charges incurred by the manufacturer for
clearance of final product from the place of removal, are
included in the definition of ''input service'' for eligibility to
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C.M.A.Nos.2244 to 2246 of 2012
availment of CENVAT credit of service tax or not?
2.The learned Tribunal followed the decisions of the
Karnataka High Court in the case of CCE & ST, LTU,
Bangalore Vs. ABB Limited reported in 2011 [23] STR 97
[Kar.] and held in favour of the assessee that the
transportation charges incurred by the manufacturer for
clearance of final product from the place of removal upto
01.04.2008, when the law was amended in this regard, were
included in the definition of ''input service''.
3.The learned counsel for the appellant/Revenue has
submitted that after the Tribunal decided these appeals, the
Hon'ble Supreme Court of India, has dealt with this issue in
two of the judgments cited at the Bar, viz., [1]CCE Vs.
Vasavadatta Cements Limited reported in 2018 [11] GSTL 3
[SC] decided on 17.01.2018 ; and [2] CCE Vs. Andhra
Sugars reported in 2018 [10] GSTL 12 [SC] decided on
05.02.2018. The relevant paras relied on by the learned
counsel for the appellant/Revenue are quoted below from
these two judgments:-
[1]CCE Vs. Vasava Dutta reported in 2018 [11] GSTL 3
[SC]:
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C.M.A.Nos.2244 to 2246 of 2012
''7.As mentioned above, the expression used
in the aforesaid Rule is ''from the place of
removal''. It has to be from the place of removal
upto a certain point. Therefore, tax paid on the
transportation of the final product from the place
of removal upto the first point, whether it is depot
or the customer, has to be allowed.''
[2]Customs Vs. Andhra Sugars reported in 2018 [10] GSTL
12 [SC]:
''5.We may refer to Circular No.97/8/2007-
S.T., dated August 23, 2007 issued by the Central
Board of Excise and Customs [CBEC]
[hereinafter referred to as the ''Board''] as per
which the definition of ''input service'' was
clarified and the Circular also provided the
conditions which are to be satisfied to cover the
case within ''place of removal''. The three
conditions contained in the circular are
[i]regarding ownership of the goods till the
delivery of the goods at the purchaser's door
steps ; [ii]seller bearing the risk of or loss or
damage to the goods during transit to the
destination and [iii]freight charges to be integral
part of the price of the goods.
...
8.As can be seen from the reading of the
aforesaid portion of the circular, the issue was
examined after keeping in mind judgments of
CESTAT in Gujarat Ambuja Cement Ltd [2017 [6]
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C.M.A.Nos.2244 to 2246 of 2012
STR 249 [Tribunal]] and M/s. Ultratech Cement
Ltd [2007 [6] STR 364 [Tribunal]]. Those
judgments, obviously, dealt with unamended Rule
2[l] of Rules 2004. The three conditions which
were mentioned explaining the 'place of removal'
are defined in Section 4 of the Act. It is not the
case of the Department that the three conditions
laid down in the said Circular are not satisfied. If
we accept the contention of the Department, it
would nullify the effect of the word ''from'' the
place of removal appearing in the aforesaid
definition. Once it is accepted that place of
removal is the factory premises of the assessee,
outward transportation 'from the said place'
would clearly amount to input service. That place
can be warehouse of the manufacturer or it can be
customer's place if from the place of removal of
goods are directly dispatched to the place of the
customer. One such outbound transportation from
the place of removal gets covered by the
definition of input service.''
4.The learned counsel for the respondent/Assessee
would submit that the controversy is now covered by the
above cited judgments of the Apex Court and the learned
Tribunal was justified in allowing the appeals of the assessee
and with respect to the remand of the matter to the learned
Tribunal, the appeal of the Revenue deserves to be dismissed
in the light of the above cited judgments.
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C.M.A.Nos.2244 to 2246 of 2012
5.Having heard the learned counsel for the parties, we
are satisfied that the matter may go back to the learned
Tribunal to look into the factual aspects of the matter again
with respect to the applicability of the above two judgments of
the Apex Court in the case of assessee and therefore, we are
disposing of the present appeal of Revenue and remit the
matter back to the Tribunal to decide the matter afresh in
accordance with law, after hearing both parties on the
applicability of the above cited two judgments of the Hon'ble
Supreme Court of India. No costs.”
7.In the instant case also, the Tribunal had followed the decision of the
High Court of Karnataka in ABB Limited (supra) and held in favour of the
assessee.
8.In the light of the judgment passed by the Hon'ble Division Bench as
noticed above, this matter also needs to be remanded to the Tribunal to take a
fresh decision and to decide as to the applicability of the two decisions of the
Hon'ble Supreme Court, which according to the assessee, are in their favour.
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C.M.A.Nos.2244 to 2246 of 2012
9.In the light of the above, these Civil Miscellaneous Appeals are
disposed of by remanding the matter to the Tribunal for fresh consideration
in accordance with law, after hearing the parties on the applicability of the
above referred judgments of the Hon'ble Supreme Court. Consequently, the
substantial questions of law are left open. No costs.
(T.S.S., J.) (S.S.K., J.)
23.09.2021
(2/2)
mkn
Internet : Yes
Index : Yes / No
Speaking order / Nonspeaking order
To
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C.M.A.Nos.2244 to 2246 of 2012
1.The Customs, Excise and Service Tax Appellate Tribunal,
South Zonal Bench, Chennai.
2.The Commissioner of Central Excise and Service Tax,
No.1, Williams Road, Cantonment,
Tiruchirappalli – 620 001.
3.The Customs, Excise and Service Tax
Appellate Tribunal, South Zonal Bench,
Shastri Bhavan Annexure,
No.26, Haddows Road,
Chennai – 600 006.
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C.M.A.Nos.2244 to 2246 of 2012
T.S. SIVAGNANAM, J.
and
SATHI KUMAR SUKUMARA KURUP, J.
mkn
C.M.A.Nos.2244 to 2246 of 2012
23.09.2021
(2/2)
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