2012 (2) TMI 265 - AT - Service Tax

Cenvat credit on services used for outward transportation of goods from the factory to the buyers premises - period involved prior to 01.04.2008 appellant provided evidences showing satisfaction of conditions specified in Circular no. 97/6/2007-ST dated 23.8.07 for availment of credit - Held that - Matter was not contested at earlier stages by the Appellants and they did not have opportunity to adduce evidence. Now evidences are submitted which should be examined and credit allowed if they are legally eligible. The impugned order is set aside and the appeal is allowed by remand to the original authority.

Summary

Issues:
Whether a manufacturer can take cenvat credit on services used for outward transportation of goods from the factory to the buyers premises prior to 1st April, 2008.

Analysis:
The dispute in this case revolves around the eligibility of a manufacturer to claim cenvat credit on services utilized for outward transportation of goods to the buyers' premises before 1st April, 2008. The definition of input services underwent an amendment post this date, specifying that credit for outward transportation up to the place of removal only would be permissible. The legal position applicable prior to 10th April, 2008, is established by the Hon'ble Punjab & Haryana High Court's ruling in the case of Ambuja Cemens Ltdt Vs CCE 2009 (14) STR 3 (P&H), which references Circular No. 97/6/2007-ST issued by the CBEC.

The appellant's counsel asserts that the conditions outlined in the circular, including delivery at the buyers' premises, seller's insurance arrangement, and excise duty payment on goods' value inclusive of freight, are met in this scenario, justifying the allowance of the disputed cenvat credit. However, the Revenue's representative highlights discrepancies from the original order, emphasizing that the goods were not delivered at the purchaser's doorstep, the seller did not bear the risk during transit, and freight charges were not integrated into the goods' price.

Upon evaluating both parties' contentions, the presiding officer finds the reasoning behind the original order's conclusion unclear. The appellants furnish evidence, such as purchase orders, demonstrating compliance with the mentioned conditions for all transactions involving outward transportation payments. Consequently, the officer deems it appropriate to reexamine this evidence and potentially grant the credit if the appellants are legally entitled to it, emphasizing an open remand where additional judgments can be relied upon.

In light of the above, the impugned order is overturned, and the appeal is allowed for remand to the original authority for a thorough review based on the evidence presented by the appellants, ensuring a fair opportunity for substantiating their claim for cenvat credit.

(Order dictated and pronounced in the open Court.)