2015 (10) TMI 2536 - AT - Service Tax

Cenvat credit - outward goods transportation service - goods sold to the buyers on the price agreed between them and delivery of goods being given at the buyers place - Held that - appellant has not included transportation charges in the assessable value of goods supplied by them to their buyers which is one of the conditions stipulated in the C.B.E. & C. Circular No. 97/8/2007, dated 23-8-2007 to be complied with by the assessee to avail the Cenvat credit on outward transportation service. Therefore, authorities below have rightly held that appellant is not entitled to Cenvat credit. - Decided against the appellant

Summary

Issues:
Denial of Cenvat credit on outward goods transportation service.

Analysis:
The appellant appealed against the denial of Cenvat credit on outward goods transportation service by the authorities below. The appellant sells goods to buyers with delivery at the buyer's place, where transportation charges are not included in the value of goods. A show cause notice was issued to deny Cenvat credit for the period April 2010 to January 2011. Both lower authorities upheld the denial, imposing duty, interest, and penalty. The appellant contended they were entitled to credit as per Circular No. 97/8/2007-S.T. The AR opposed, stating the appellant did not meet the circular's conditions.

The Circular No. 97/8/2007 stipulates three conditions for availing Cenvat credit on outward transportation service: (A) transportation charges should be integral to the assessable value, (B) ownership of goods remains with the assessee, and (C) insurance charges are borne by the assessee. The appellant did not include transportation charges in the assessable value, leading to the authorities rightly denying the Cenvat credit. The impugned order was upheld, and the appellant's appeal was dismissed.