2011 (3) TMI 1203 - AT - Central Excise

Input service credit on outward transportation of final products to their sister unit and to their customers from their factory gate denied - Held that - If the appellants have been able to satisfy the lower appellate authority that the appellants have complied with the conditions of Board Circular No. 97/8/2007 dated 23.08.2007, the appellants are entitled for input service credit on goods transportation agency services - as this fact has to be examined by the adjudicating authority whether the transportation cost has been included in the assessable value by the appellants in compliance with the Board Circular stated here-in-above remand back the matter to the original adjudicating authority to re examine the issue.

Summary

Issues: Denial of input service credit on outward transportation of final products to sister unit and customers from factory gate.

Analysis:
The appellants filed appeals along with stay applications challenging the denial of input service credit on outward transportation of final products. The Tribunal observed that the issue was narrow, and after hearing both sides, the applications for waiver of pre-deposit of duty and interest were allowed. The appeals were taken up for disposal with the consent of both parties. The appellants relied on a previous decision in the case of L.G. Electronics (India) Pvt. Ltd. where it was held that the assessee was entitled to input service credit on goods transportation agency services. The appellants argued that they should also be entitled to such credit. On the other hand, the lower appellate authority noted that the appellants failed to provide evidence supporting their claim that the outward transportation cost was part of the transaction value of the goods cleared, leading to the denial of credit.

The Tribunal considered both sides' submissions and emphasized that if the appellants could demonstrate compliance with the conditions of Board Circular No. 97/8/2007, they would be entitled to input service credit on goods transportation agency services. The Tribunal directed the adjudicating authority to examine whether the transportation cost had been included in the assessable value by the appellants in line with the Board Circular. The matter was remanded back to the original adjudicating authority for a detailed examination and to pass an appropriate order after providing a reasonable opportunity to the appellants to present their case. All other issues were left open, and the appeals along with stay applications were disposed of accordingly.