2016 (7) TMI 1206 - HC - Central Excise

Cenvat Credit - input services - GTA services - outward transportation beyond the place of removal appeared - Held that - In fact the question, whether price of goods is on FOR basis or not is an important aspect necessary to decide the question whether it can be included within input service or not and since for determination thereof, matter has been remanded, therefore, in our view, it would not be appropriate at this stage to answer the substantial question of law formulated above and instead let the matter be decided by competent authority as per remand order passed by Tribunal after recording factual findings and, therefore, we leave this question open.

Summary

Issues: Interpretation of 'input service' under Cenvat Credit Rules, 2004 in the context of GTA outward services.

Analysis:
1. Interpretation of 'input service' under Cenvat Credit Rules, 2004:
The main issue in this case revolved around the interpretation of whether GTA outward services fall within the ambit of 'input service' as defined under 2(I)(ii) of the Cenvat Credit Rules, 2004. The Tribunal considered the Assessee's contention that the sales of finished goods to customers/dealers are on FOR destination basis, where the cost of transportation is an integral part of the price charged from the customer, and the risk of damage or loss during transit lies with the Assessee. The Tribunal opined that if the Assessee's claim is correct, the transportation of goods up to the place of the consumer could be covered by the definition of 'input service.' Consequently, the Tribunal remanded the matter for further examination in its judgment dated 12.04.2010.

2. Importance of determining the pricing basis:
The Court emphasized the importance of determining whether the price of goods is on FOR basis or not in deciding whether it can be included within the scope of 'input service.' Since this crucial aspect required factual findings, the Court refrained from answering the substantial question of law at that stage. The Court decided to let the competent authority make a determination based on the Tribunal's remand order. The Court advised the Appellant to raise the question again after the competent authority decides the matter pursuant to the Tribunal's order.

3. Disposition of the appeal:
In conclusion, the Court disposed of the appeal, leaving the substantial question of law unanswered at that stage. The Court directed the matter to be decided by the competent authority as per the Tribunal's remand order, emphasizing the need for factual findings to determine whether the transportation services in question qualify as 'input service' under the Cenvat Credit Rules, 2004. The judgment highlighted the importance of clarity regarding the pricing basis of goods in determining the eligibility of transportation services as 'input service.'