2016 (1) TMI 22 - AT - Service Tax

Cenvat Credit - GTA service - service tax paid on outward freight charges for delivering the goods from the factory to the customer s premises - Held that - In view of the decisions of the Hon ble High Court in the case of Commissioner of Central Excise & Service Tax, LTU, Bangalore Vs. ABB Limited 2011 (3) TMI 248 - KARNATAKA HIGH COURT , the matter is remanded back to the original adjudicating authority for de novo adjudication; the original adjudicating authority will give the appellants sufficient opportunity of providing necessary evidence in the form of documents showing compliance of the conditions mentioned in the Board s Circular No. 97/8/2007-S.T. dated 23.8.2007 to claim Cenvat credit of service tax paid on outward freight charges. - Matter remanded back.

Summary

Issues: Denial of Cenvat credit of service tax paid on outward freight charges for delivering goods to customer's premises.

Analysis:
The Appellate Tribunal CESTAT Bangalore dealt with the issue of denial of Cenvat credit of service tax paid on outward freight charges by M/s Flint Group India Pvt. Ltd. The appellant was engaged in the manufacture of various products falling under different chapters of the Central Excise Tariff Act, 1985. The denial of credit was based on the appellant's failure to fulfill the conditions outlined in Board's Circular No. 97/8/2007-S.T. The circular required the freight charges to be an integral part of the price of goods, and the sale and transfer of property in goods to occur at the said place. The impugned order passed by the Commissioner (Appeals) highlighted the appellant's inability to provide documentary proof demonstrating compliance with the conditions, leading to the disallowance of the credit.

The authorized representative of the appellant argued that they transported goods on an F.O.R basis, retaining ownership and bearing the risk of damage during transportation. On the other hand, the respondent argued that the appellant had multiple opportunities to provide evidence of compliance but failed to do so. The Tribunal, after considering the submissions and a relevant High Court decision, remanded the matter back to the original adjudicating authority for a fresh adjudication. The original authority was directed to allow the appellant to provide necessary evidence demonstrating compliance with the conditions specified in the circular within three months from the date of the order.

Additionally, it was noted that there was another appeal by the same appellant on the same issue against the same Order-in-Appeal. All three appeals were disposed of by the Tribunal through a common order, directing a remand for further adjudication. The judgment emphasized the importance of providing sufficient opportunity for the appellant to present the required evidence to support their claim for Cenvat credit on outward freight charges.