2016 (8) TMI 193 - AT - Central Excise

Cenvat Credit - GTA services - outward transportation - upto the place of removal appellant failed to submit documentary evidence that freight charges are the integral part of the price of the goods Held that appellant to produce all relevant documents and will get opportunity to be heard - impugned order set aside remand of both appeal to original adjudicating authority.

Summary

Issues:
- Appeal against Commissioner (Appeals) order dated 31.07.2013 disallowing cenvat credit on transportation and freight charges.
- Dispute over the place of removal and eligibility to avail credit on service tax paid on outward freight charges.
- Allegation of appellant wrongly availing cenvat credit.
- Contrary findings between appellant and authorities on ownership of goods and integral part of freight charges in price.
- Failure to produce documents justifying cenvat credit on outward transportation.

Analysis:
The appellant, a manufacturer of dutiable graphite products, filed two appeals against the Commissioner (Appeals) order disallowing cenvat credit on transportation and freight charges. The appellant regularly paid duty and claimed credit under Rule 2(l) of the Cenvat Credit Rules 2004. The issue revolved around the alleged wrongful availing of cenvat credit on service tax paid for transporting goods to consumer premises. The adjudicating authority disallowed the credit, which was upheld by the Commissioner (Appeals) in the impugned order dated 31.07.2013.

The appellant contended that all sales were FOR destination basis, supported by relevant documents, but the authorities did not appreciate this. They argued that freight charges were integral to the price of goods delivered at customer premises, making the place of removal the factory gate. The Commissioner (Appeals) rejected the appellant's contentions, citing lack of concrete evidence of ownership and integral freight charges in the price of goods.

The appellant's representative highlighted previous judgments allowing cenvat credit on outward transportation services, supported by documentary evidence. Despite submitting relevant records, the authorities denied the credit. On the other hand, the respondent reiterated the Commissioner (Appeals) findings, stating the appellant failed to justify cenvat credit on outward transportation.

After considering both parties' submissions, the Judicial Member set aside the impugned order, remanding the appeals to the original adjudicating authority. The direction was to reevaluate the appellant's claim regarding cenvat credit on outward transportation, allowing the appellant to present all justifying documents. The adjudicating authority was instructed to issue a speaking order in compliance with natural justice principles, ultimately allowing both appeals by way of remand.