COMMISSIONER OF CUSTOMS CENTRAL EXCISE AND SERVICE TAX, GUNTUR versus M/S. THE ANDHRA SUGARS LTD.

Citation: [2018] 1 S.C.R. 435 · Decided: 05-02-2018 · Supreme Court of India · Bench: A.K. SIKRI · Disposal: Dismissed
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COMMISSIONER OF CUSTOMS CENTRAL EXCISE AND
SERVICE TAX, GUNTUR
v.
M/S. THE ANDHRA SUGARS LTD.
(Civil Appeal No. 11711 of 2016)
FEBRUARY 05, 2018
[A. K. SIKRI AND ASHOK BHUSHAN, JJ.]
Cenvat Credit Rules, 2004 – r. 2(l) – Cenvat Credit – Input
services – Place of removal – Assessee took credit of input services
namely service tax paid on transportation charges upto the place
of customers – Admissibility – Held: As per the definition of input
service, service used by the manufacturer of clearance of final
products ‘from the place of removal’ to the warehouse or customer’s
place etc., was exigible for Cenvat Credit – It cannot be said that
the outward transportation provided beyond the place of removal
is not eligible for input service for availing Cenvat Credit – Once it
is accepted that place of removal is the factory premises of the
assessee, outward transportation ‘from the said place’ would 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 the goods
are directly dispatched to the place of the customer.
Dismissing the appeals, the Court
HELD: Having regard to the definition of ‘input service’
that was prevailing at the relevant time i.e. prior to April 1, 2008,
the submission of the Department that outward transportation
engaged for removal of goods from factory to customer premises,
cannot be considered as an input service since premises of
customer is not recognized as a place of removal under the Central
Excise Act, cannot be accepted. As per the said definition, service
used by the manufacturer of clearance of final products ‘from the
place of removal’ to the warehouse or customer’s place etc., was
exigible for Cenvat Credit. 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 the
[2018] 1 S.C.R. 435
435
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SUPREME COURT REPORTS
[2018] 1 S.C.R.
contention of the Department, is accepted, it would nullify the
effect of the word ‘from’ the place of removal appearing in the
said 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 the 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. [Paras 6-8][439-F-H; 442-C-D]
Commissioner of Central Excise and Service Tax,
Bangalore v. ABB Ltd. Vadodara 2011 (23) STR 97
(Kar); Commissioner of Central Excise Belgaum v. M/
s. Vasavadatta Cements Ltd.; Gujarat Ambuja Cements
Ltd. v. CCE, Ludhiana 2007 (6) STR 249 Tri-D; M/s
Ultratech Cements Ltd v. CCE Bhavnagar 2007-TOIL-
429-CESTAT-AHM – referred to.
Case Law Reference
2011 (23) STR 97 (Kar)
referred to
Para 3
2007 (6) STR 249 Tri-D
referred to
Para 8
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 11711
of 2016.
From the Judgment and Order dated 16.07.2014 of the High Court
of Judicature at Hyderabad for the State of Telangana and The State of
Andhra Pradesh in Central Excise Appeal No. 88 of 2014.
WITH
C. A. Nos. 11872, 11873 and 11910 of 2016.
K. Radhakrishnan, Sr. Adv., Ms. Nisha Bagchi, Arijit Prasad, Ms.
Shirin Khajuria, Ms. Sanskriti Bhardwaj, Ms. Ayushi Gaur, Ms. Pooja
Sharma, B. Krishna Prasad, Kartik Kurmy, Praveen Kumar, Advs. for
the Appellant.
Ms. Kiran Suri, S. K. Bagaria, Sr. Advs., S. J. Amith, Dr. (Mrs.)
Vipin Gupta, Balaji Srinivasan, V. Lakshmikumaran, L. Badri Narayanan,
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Aditya Bhattacharya, Victor Das, Chanakya Lakshmikumaran, Punit
D. Tyagi, Apeksha Mehta, Ajit Kumar, Yogendra A., M. P. Devanath,
Advs. for the Respondent.
The Judgment of the Court was delivered by
A. K. SIKRI, J. 1. The question of law which needs
determination in all these appeals is identical.  It pertains to Cenvat Credit
in respect of service tax paid on goods that are transported to the
purchaser after the sale.  The question, therefore, which needs
determination is as to whether the expression ‘input service’ as defined
in Rule 2(l) of the Cenvat Credit Rules, 2004 (hereinafter referred to as
the ‘Rules, 2004’), in the context of a service provider, would also include
services which
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