Board grants a favour to assessee But Tribunal says, ‘NO'
IT is by now, as they say, well settled law that Board's instructions are binding on the field staff and the revenue cannot question the correctness of the Board Circular or challenge it in an appellate forum, as maintained by the Apex Court in Ranadey Micronutirients, Paper Products etc. I am never tired of repeating the historic words of the Supreme Court, "Consistency and discipline are of greater importance than winning or losing a court case"
CBEC in Circular in F.No. 137/3/2006-CX.4 dated 02.02.2006, clarified that "in case of depot sales of goods, the credit of service tax paid on the transportation of goods up to such depot would be eligible, irrespective of the fact, whether the goods were chargeable to excise duty at specific rates or ad valorem rates on the basis of valuation under section 4 or 4A of the Central Excise Act."
But recently in a Stay Order, the CESTAT did not allow this and observed, "Though in terms of Board's Circular No. 137/3/06-CX dated 2/2/06, when the goods cleared from the factory are sold from the depot and for the purpose of determining the assessable value of the goods under Section 4, it is the depot which is the 'place of removal' and for this reason, the assessable value includes the cost of transportation of the goods from the factory gate to the Depot, the Cenvat credit of service tax paid on the transportation upto Depot would be admissible even if the goods attract duty at a specific rate, the correctness of this circular is doubtful".
Are the Board Circulars binding on the Department?
If they are so, and when an assesse relies on a Circular, can its correctness be doubted and benefit be denied even by the Apex Court?
Look out for this judgment tomorrow