Cenvat Credit cannot be denied on removal of goods from the place of removal up to customers place

The CESTAT, Ahmedabad in Phillips Carbon Black Limited v. C.C.E. & S.T.-Vadodara-(ii) [Excise Appeal No. 10243 of 2019 dated April 29, 2022] set aside the order denying the CENVAT Credit to the assessee in respect of outward Goods Transport Agent ("GTA") supply for period prior to April 01, 2008. Held that, the CBIC has prescribed certain conditions for allowing credit which need to be satisfied and remanded back the matter for passing a fresh order after verifying the documents to ascertain that whether the assessee has fulfilled such conditions.

Facts

This appeal has been filed by Phillips Carbon Black Limited ("the Appellant"), against the order ("the Impugned Order") denying the CENVAT Credit to the Appellant, issued by the Revenue Department ("the Respondent") on the ground that the Appellant had wrongly availed of CENVAT Credit on outward supply of GTA for the period prior to April 1, 2008. The Respondent asserted that even prior to April 1, 2008 certain criteria to fulfil for allowing the CENVAT Credit on outward GTA supply was prescribed by the CBIC vide Circular No. 97/8/2007-ST dated August 23, 2007 ("the Circular"). Further, it was alleged that the Appellant has not submitted the documents to satisfy the criteria for allowing credit as prescribed in Circular.

The Appellant contended that, from April 1, 2008 the definition of the input service, the service related to removal of inputs was "from the place of removal", which was amended as "up to place of removal". Therefore, prior to April 1, 2008 the CENVAT credit on outward supply of GTA was available.

Issue

Whether the Appellant is entitled for CENVAT credit in respect of outward GTA supply for period prior to April 1, 2008?

Held

The CESTAT, Ahmedabad in Excise Appeal No. 10243 of 2019 dated April 29, 2022 held as under:

• Observed that, the services related to removal of the goods was "from the place of removal" which was replaced as amended w.e.f. April 1, 2008 as "up to the place of removal". Therefore, the Cenvat Credit, prima facie is available in case of outward transportation for the services availed from the place of removal up to the customer’s place.
• Noted that, the CBIC has prescribed certain conditions for allowing credit which needs to be satisfied. Further, observed that, the Respondent has not verified that the conditions of the Circular have been complied or not. Thus, the matter needs to be reconsidered.
• Set aside the Impugned Order and remanded back the matter to the Respondent for passing a fresh order after verifying the documents to ascertain that whether the Appellant has fulfilled the condition of the Circular.