2016 (8) TMI 194 - AT - Central Excise

Cenvat credit eligible on input service - GTA service used for the purpose of outward transportation of goods from factory to premises Held that - assessee failed to establish fact of bearing the risk of loss to goods during transit before adjudicating authority case remanded to adjudicating authority - appeals allowed by way of remand.

Summary

Issues:
1. Appeal filed by Revenue against Commissioner (Appeals) order.
2. Availment of cenvat credit on service tax for outward transportation.
3. Denial of cenvat credit by Additional Commissioner.
4. Commissioner (Appeals) allowing the assessee's appeal.
5. Interpretation of ownership and responsibility in FOR sales.
6. Compliance with Board Circular dated 23.08.2007.
7. Lack of documentary evidence for insurance coverage.
8. Remand of the case back to the adjudicating authority.

Analysis:
1. The appeals were filed by the Revenue against the Commissioner (Appeals) order, which set aside the Order-in-Original. The issue revolved around the availment of cenvat credit on service tax for outward transportation of goods by the assessee, a cement industry. The Revenue contended that the post-clearance use of services in transporting manufactured goods cannot be considered an input service for the final product's manufacture.

2. The Commissioner (Appeals) examined documents like quotations, invoices, agreements with the transporter, and payment advice, concluding that the goods were delivered on FOR basis, and the responsibility of delivering goods in good condition till reaching the destination lay with the assessee. This ownership and responsibility aspect satisfied the conditions specified in the Board's Circular dated 23.08.2007.

3. The Revenue argued that the Commissioner's order was not proper, citing non-compliance with the Board Circular dated 23.08.2007. They contended that the assessee failed to establish bearing the risk of loss or damage during transit, and documentary evidence for insurance coverage was lacking. The Revenue highlighted previous appeals by the assessee on similar issues, which were remanded for further examination.

4. In light of the disputed facts regarding sales being on FOR basis and compliance with the Circular dated 23.08.2007, the Tribunal set aside the impugned order and remanded the case to the adjudicating authority. The assessee was granted the opportunity to present all relevant documents, and the adjudicating authority was instructed to pass a reasoned order following principles of natural justice. Consequently, both appeals were allowed by way of remand.

This detailed analysis covers the issues, arguments, findings, and the final decision of the Appellate Tribunal CESTAT BANGALORE regarding the cenvat credit dispute on outward transportation services availed by the assessee.