The Customs, Excise and Service Tax Appellate Tribunal, Delhi Bench comprising of Justice Dilip Gupta (President) and Hemambika R. Priya (Technical Member) allowed cenvat credit of service tax paid on rail freight.
BACKGROUND
The appellant was engaged in the manufacture of cement, and availed the services of West Central Railway division of Indian Railways, for transportation of their finished goods from the plant to their depots/Godowns/ Warehouses.
With effect from 1.10.2012, transportation of goods by Rail was brought under the service tax net and Indian Railways charged and collected service tax on transportation services on the value of total freight, less abatement, as per Board’s Circular no. 27/2012-ST dated 26.09.2012.
The WCR charged and collected service tax on the rail freight amount from the appellant. At the time of consigning the goods, WCR issued one copy of the railway receipt/consignment note to the appellant which contained details like name of the consignor and consignee name, value of service, service tax particulars, like amount of service tax, registration number of service provider, description of service, Wagon number and commodity code.
These original RRs had to be returned to the railways on receipt of the goods at their depot/warehouse/godown. At the time of return of the original RR, WCR provided certified copy to the appellant to enable them to take CENVAT credit of the service tax paid by them. This document evidenced the factum of payment of service tax.
No other document/invoice was issued by WCR at the time of consigning the goods or thereafter. Based on the request by the appellant, WCR issued Monthly Consolidated Certificates evidencing payment of service tax corresponding to the authenticated photo copies of RRs. This practice was intimated to the Department by the appellant.
The department issued a notice to the appellant for denial of Cenvat credit amounting to Rs. 1,18,16,326/- availed on certified copy of RRs for non-fulfillment of condition of Rule 9 of the CENVAT Credit Rules, 2004.
OBSERVATIONS
CESTAT noted that credit has been denied by the appellate authority only on the grounds that the assessable value has not been indicated. The freight amount mentioned in all the RRs is the assessable amount for the disputed period. Once the payment of tax is not disputed, and the receipt of service is not disputed and further the revised STTG document has been issued by the WCR, there can be no justification for denial of credit due to the appellant.
Case Title: M/s Diamond Cement Versus Commissioner, Central Goods & Service Tax
Citation: Excise Appeal No. 50168 of 2021
