2016 (7) TMI 1171 - AT - Central Excise

Input service credit on the activity of unloading and shifting the goods in the premises of the buyer denied - Held that - As per purchase order, the appellant was required to supply the goods at the premises of M/s Maruti Udyog Ltd. These facts are not in dispute therefore, any expense incurred by the appellant till the goods are delivered in the godown of M/s Maruti Udyog Ltd, the appellant is entitled to avail cenvat credit thereon. In these circumstances, the service of contractor availed by the appellant for unloading and shifting the goods in the godown of M/s Maruti Udyog Ltd. are entitled to input service credit. Therefore appellant has correctly availed cenvat credit on the activity of unloading and shifting of the godown of the goods - Decided in favour of assessee.

Summary

Issues:
Claim of input service credit on unloading and shifting goods at buyer's premises.

Analysis:
The appellant, a manufacturer of glass items, appealed against an order denying input service credit for unloading and shifting goods at the buyer's premises. The appellant transported goods to the buyer's location and engaged a contractor for unloading and shifting the goods to the buyer's godown. The revenue contended that these activities were not related to the sale price of the goods. The appellant argued that the unloading charges were included in the sale price, entitling them to input service credit.

The appellant's counsel highlighted that as per the purchase order, the appellant was obligated to deliver goods at the buyer's premises, including unloading charges in the sale price. Therefore, they claimed entitlement to input service credit for unloading and shifting activities. On the contrary, the revenue argued that these services were availed beyond the place of removal, thus disqualifying the appellant from claiming cenvat credit.

After hearing both parties, the tribunal examined the purchase order requirements and confirmed that the appellant was indeed required to deliver goods to the buyer's premises. Consequently, any expenses incurred by the appellant until goods were delivered to the buyer's godown entitled them to avail cenvat credit. The tribunal ruled in favor of the appellant, stating that the contractor services for unloading and shifting goods to the buyer's godown qualified for input service credit. The impugned order was set aside, allowing the appeal with consequential relief.

In conclusion, the tribunal's decision upheld the appellant's right to claim cenvat credit for unloading and shifting goods at the buyer's premises, emphasizing that such activities were integral to the sale transaction and thus eligible for input service credit under the relevant provisions.