2012 (11) TMI 524 - AT - Central Excise

Cenvat credit on outward transportation - Held that - There is no dispute as to the fact that appellant has produced few specimen purchase orders and other documents before the first appellate authority to canvas their point that the goods cleared from the factory premises are on FOR basis. The first appellate authority has not allowed the appeal only on the ground that they could not produce further documents to him till the date of order, thus this issue needs to be reconsidered as to whether all the documents are required to come to conclusion for deciding whether the despatches made by the appellant are on FOR basis or otherwise. Also to consider the judgment in the case of Ambuja Cements Limited (2009 (2) TMI 50 - PUNJAB & HARYANA HIGH COURT) wherein decided that the place of removal in case of FOR basis, is the premises of customer before coming to a conclusion.

Summary

Issues involved:
- Waiver of pre-deposit of amounts confirmed as ineligible cenvat credit, interest, and penalties.
- Availment of cenvat credit of service tax on outward transportation of goods.

Analysis:
The judgment revolves around stay petitions seeking the waiver of pre-deposit of amounts confirmed as ineligible cenvat credit, interest, and penalties. The main issue in this case concerns the availment of cenvat credit of service tax paid on the outward transportation of goods, specifically cement, from the appellant's factory to their client's place and up to the dump site. The appellant argued that all despatches were made on FOR basis, supported by specimen purchase orders. The first appellate authority accepted the evidence but held against the appellant for not producing the entire set of purchase orders for verification. The appellant relied on the judgment of the Hon'ble High Court of Punjab & Haryana in a similar case to support their claim.

The departmental representative, however, cited a different judgment from the Hon'ble High Court of Karnataka and argued that any service tax liability paid after a certain date on outward transportation of goods is ineligible for credit due to a change in the definition of input services. The appellate tribunal, after considering both sides' submissions, found that the appellant had indeed produced specimen purchase orders and documents to support their claim of despatches being on FOR basis. The tribunal noted that the first appellate authority's decision was based on the appellant's failure to produce further documents by the order date. Therefore, the tribunal decided to set aside the impugned orders and remand the matter back to the adjudicating authority for reconsideration.

The tribunal emphasized the need for the adjudicating authority to reevaluate whether all documents are necessary to determine if the despatches were on FOR basis and to consider the relevant judgments before reaching a conclusion. The appellant was instructed to cooperate with the adjudicating authority in producing required documents for verification. The tribunal clarified that the adjudicating authority could either request documents at their office or delegate someone to verify records at the appellant's factory. Ultimately, the stay petitions and appeals were disposed of with the decision to remand the matter for further consideration.