Cenvat Credit On GTA Services For Outward Transportation Of Goods To Buyer's Premises – CESTAT Larger Bench Distinguishes SC Decision In Ultratech Cement

The Larger Bench of the CESTAT has held that for the purpose of eligibility of Cenvat credit on GTA service used for outward transportation, where clearances of goods are against FOR contract basis, the authority needs to ascertain the 'place of removal' by applying the judgments of the Supreme Court in Emco and Roofit Industries, the Karnataka High Court decision in Bharat Fritz Werner, and the CBEC Circular dated 8 June 2018.

The Larger Bench in this regard noted that in Bharat Fritz Werner, all aspects of the dispute were considered, including the CBEC Circular and the abovementioned judgments of Supreme Court, to conclude that the place of removal was the buyer's premises.

Distinguishing the Supreme Court decision in the case of Ultratech Cement, the Larger Bench noted that the Supreme Court, though in paragraph 13 observed that Cenvat credit on GTA service availed for transport of goods from the place of removal to buyers' premises was not admissible, but the principles in ascertaining the place of removal in the context of admissibility of Cenvat credit on GTA Services were not laid down by the Court there.

The issue before the Larger Bench in Ramco Cements Limited v. Commissioner [Interim Order No. 40020/2023, dated 21 December 2023] was admissibility of Cenvat credit on the service tax paid on GTA (outward transportation of goods) service for the period after delivery of the judgment of the Supreme Court in Ultratech Cement Ltd. and the CBIC Circular dated 8 June 2018.

Reference to Larger Bench to be heard at instance of intervener even if appellant settles case under SV(LDR) Scheme - Intervener need not be an aggrieved party

The Larger Bench also held that the hearing and resolution of the issue referred to the Larger Bench is be continued at the instance of the intervener even if the case of the appellant has been settled under Sabka Vishwas (Legacy Dispute Resolution) Scheme, subsequent to the reference to the Larger Bench of the Tribunal.

The Bench thus rejected the contention of the Department that the Miscellaneous Application filed by the intervener was neither maintainable nor entertainable as the intervener was not aggrieved by the decision arising out of the Order-in-Appeal in question. The LB in this regard opined that to be an intervener, on a reference before a Larger Bench, it is not necessary to be an aggrieved party in the appeal from which reference is made.

The Tribunal also noted that in the present case the intervener had shown that it was an interested party to the reference, as the appeals involving similar issue are pending before the Principal Bench of the Tribunal at Delhi.

The LB also noted that the resolution of the reference by the Larger Bench would not be limited to the present appeal but would have implication on all pending appeals involving same issue and awaiting the outcome of the present reference.

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