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2016 (7) TMI 1165 - AT - Central ExciseCENVAT credit on outward transportation charges - denial of claim on the premise that the appellant has not complied with the condition of CBEC circular No. 97/8/2007-ST dated 23.8.2007 - Held that - It is a fact on record that the appellant has submitted all the documents i.e. purchase order and invoices before the adjudicating authority in reply to the show cause notice. However, the finding of the Commissioner (appeals) that the appellant has not produced evidence to support their claim, is not tenable. As the appellant produced all the documents to comply with the condition of CBEC circular No. 97/8/2007-ST dated 23.8.2007. The adjudicating authority was duty bound to consider the same and was required to pass appropriate order As examined the reply to the show cause notice and the documents produced by the appellant in support their claim. The said documents qualify the condition of CBEC circular No. 97/8/2007-ST dated 23.8.2007. As such the appellant was duty bound to supply the goods at the buyer s end and on transportation charges the appellant has paid duty. In the circumstance, thus hold that the appellant has correctly availed the credit on outward transportation charges. - Decided in favour of assessee.
Issues: Denial of credit on outward transportation charges under Cenvat Credit Rules, 2004
Analysis: Issue 1: Denial of credit on outward transportation charges The appellant appealed against the order denying credit on outward transportation charges for the period of January 2012 to December 2012, citing non-compliance with CBEC circular No. 97/8/2007-ST dated 23.8.2007. The Revenue contended that outward transportation charges were not eligible for input service credit beyond the place of removal, as per Rule 2(I) of the Cenvat Credit Rules, 2004. Issue 2: Compliance with CBEC circular No. 97/8/2007-ST The appellant argued that they complied with the conditions of the CBEC circular by availing input service credit for outward transportation charges paid on goods transported to the buyer's end. They highlighted that the freight was included in the final product cost, duty was discharged, and insurance charges were not paid for transportation. The appellant maintained that they fulfilled the requirements of the circular and were entitled to avail the credit. Issue 3: Lack of Evidence and Judicial Review The AR contended that the appellant failed to produce evidence before the Commissioner (Appeals), leading to the rejection of credit. However, the Member (Judicial) found that the appellant had submitted all relevant documents, including purchase orders and invoices, to support their claim. The Member criticized the lower authorities for not considering the evidence presented by the appellant, leading to a denial of credit without proper judicial review. The Member held that the impugned order lacked merit and violated principles of natural justice. Conclusion: The Member (Judicial) set aside the impugned order, allowing the appeal and granting consequential relief. The decision was based on the appellant's compliance with the CBEC circular, proper submission of documents, and the arbitrary denial of credit by the lower authorities. The judgment emphasized the importance of a fair judicial review and adherence to principles of natural justice in such matters.
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