2016 (12) TMI 385 - AT - Central Excise

CENVAT credit - GTA Services - input service as defined in Rule 2(l) of Cenvat Credit Rules, 2004 - Held that - I find that the appellants, in their appeal memo has enclosed sample copies of invoices and respective purchase orders wherefrom it is prima facie clear that the sale is on FOR basis. Therefore, it is necessary that all these documents need examination to ascertain the condition of sale before arriving at any conclusion whether CENVAT credit is admissible on the outward transportation up to the place of removal. Therefore, the mater is required to be remanded to the adjudicating authority to examine these evidences. Accordingly, the impugned order is set-aside, and matter is remanded to the adjudicating authority for deciding the issue afresh on the basis of evidences on records and the evidences that would be produced during the course of hearing. Needless to mention that a reasonable opportunity of hearing be allowed to the Appellant - appeal allowed by way of remand.

Summary

Issues:
Appeal against denial of CENVAT credit on outward transportation services under Rule 2(l) of Cenvat Credit Rules, 2004.

Analysis:
The appeal was filed against the order passed by the ld. Commissioner (Appeals) denying CENVAT credit on GTA Services for outward transportation of goods from April 2011 to September 2011. The appellant contended that since the sale is on Free on Rail (FOR) basis, they bear the outward transportation charges, making it qualify as Input Services under Rule 2(l) of Cenvat Credit Rules, 2004. The appellant's advocate argued that relevant invoices and purchase orders supporting the FOR basis were not examined before denying the credit. The Revenue, represented by the Authorized Representative, reiterated the findings of the ld. Commissioner (Appeals).

The Member (Judicial) observed that the appellant submitted sample copies of invoices and purchase orders indicating the sale is on FOR basis. It was deemed crucial to examine these documents to determine the sale condition before deciding on the admissibility of CENVAT credit for outward transportation up to the place of removal. Consequently, the impugned order was set aside, and the matter was remanded to the adjudicating authority for a fresh decision based on the evidence on record and any additional evidence presented during the proceedings. The appellant was granted a reasonable opportunity of hearing, and all issues were left open. The appeal was allowed by way of remand.

This judgment highlights the significance of thoroughly examining relevant documents to ascertain the nature of transactions before denying CENVAT credit on outward transportation services. It emphasizes the need for a fair and comprehensive assessment of evidence to determine the admissibility of credit under the Cenvat Credit Rules, 2004. The decision to remand the matter underscores the importance of a proper evaluation process based on all available evidence to ensure a just and informed outcome in matters concerning tax credits and liabilities.