2017 (3) TMI 641 - AT - Central Excise

CENVAT credit - outward freight (Goods Transport Agency service) - whether credit availed by the Appellant on the outward freight (GTA service) relates to the export of goods on FOB basis or otherwise? - Held that - the authorities below have rejected their claim for non-production of the relevant documents which now they claim are in their possession. In the interest of justice, the matter is remitted to the adjudicating authority for scrutiny of the documents in the light of the claim made by the appellants that export are on FOB basis and the credit was availed on the outward freight(GTA service) for export goods only - appeal allowed by way of remand.

Summary

Issues: Admissibility of CENVAT credit on outward freight (Goods Transport Agency services) for export goods on FOB basis.

Analysis:
The case involved a dispute regarding the admissibility of CENVAT credit on outward freight (Goods Transport Agency services) for export goods during the period 2008-2010 and 2011. The appellant had availed credit on such services, but a demand notice was issued, alleging that the credit was not admissible. The demands were confirmed with interest and penalties by the adjudicating authority and upheld by the Commissioner (Appeals), leading to the present appeals.

The appellant contended that the credit availed on outward freight was related to the export of goods only and that they were unable to produce relevant documents during the initial proceedings to establish this fact. However, they now claimed to possess the necessary documents and requested the matter to be remitted to the adjudicating authority for verification. The Revenue did not object to this request.

The key issue to be addressed was whether the credit availed on outward freight for Goods Transport Agency services was indeed related to the export of goods on a Free on Board (FOB) basis or not. The appellate tribunal noted that the authorities had rejected the appellant's claim due to the non-production of relevant documents, which the appellant now claimed to have. In the interest of justice, the tribunal remitted the matter to the adjudicating authority for scrutiny of the documents in light of the appellant's claim that the exports were on FOB basis and the credit was availed specifically for export goods.

Consequently, the impugned order was set aside, and the appeals were allowed by way of remand to the adjudicating authority. It was emphasized that the appellant should be given a reasonable opportunity of hearing during the verification process to ensure a fair examination of the relevant documents and claims.