2016 (12) TMI 832 - AT - Central Excise

Denial of CENVAT credit - outward transportation services - denial on the ground that the appellants had failed to prove any contract between the buyer and the seller to deliver of the goods, further they have not established with documentary evidence that the sale had taken place at FOR destination - Held that - on identical issue this Tribunal has referred appeals to the adjudicating authority for denovo consideration to reconsider the matter based on the guidelines contained in the Board s Circular dated 23.08.2007. Following judicial propriety, I too remand the case back to the adjudicating authority to reconsider the matter based on the applicable Board Circulars. Denial of credit - denial on the ground that the documents are not in the name of the appellant company, Cuddalore but issued in the name of their Head Office at Madurai - Held that - The services availed have no nexus with the manufacturing or business activity of the appellants. On this count, this part of the appeal totalling disallowance of credit of ₹ 17.521/- is therefore, sustained and in consequence, the appeal of the appellants on this count stands rejected. Appeal allowed by way of remand.

Summary

Issues involved: Disallowance of credit of service tax on transportation during removal of excisable goods; denial of credit due to documents not in the name of the appellant company.

Analysis:

1. Issue 1 - Disallowance of credit of service tax on transportation:
The appeals were filed against the common order-in-appeal regarding the disallowance of credit of service tax availed on transportation during removal of excisable goods. The original authority disallowed the credit citing lack of proof of a contract between buyer and seller for delivery of goods at "FOR" destination. The Commissioner (Appeals) upheld this decision, emphasizing the absence of relevant contract terms in the invoices regarding freight and insurance. During the hearing, the appellant's consultant argued that the excise duty-inclusive price indicated goods were FOR destination and all risks were borne by the appellant. He referenced various judgments supporting their case. The Tribunal noted the need for documentary evidence and remanded the matter to the adjudicating authority for reconsideration based on applicable guidelines and legal precedents.

2. Issue 2 - Denial of credit due to documents not in the name of the appellant company:
In appeal No. E/41827/2016, the credit was denied on bills related to services not directly linked to the appellant company at Cuddalore, such as man power supply, maintenance for a windmill outside the factory, and courier and security services for the Head Office. The appellant argued that these services were essential for their operations. The Commissioner (Appeals) upheld the denial, stating the lack of nexus between the services and the manufacturing or business activities of the appellant. The Tribunal agreed with the Commissioner, sustaining the disallowance of credit amounting to &8377;17,521. The appeal was dismissed on this ground.

In conclusion, one appeal was allowed by way of remand for the issue of disallowance of credit on outward transportation, while the other appeal was allowed by way of remand only for the same issue. However, the appeal concerning the denial of credit due to documents not in the name of the appellant company was dismissed. Both appeals were disposed of accordingly.