2017 (7) TMI 164 - AT - Central Excise

CENVAT credit - denial on the ground that the handling of pipes by the appellant being beyond the place of removal hence credit availed on such handling charge is not admissible - Held that - the appellant are required to deliver the manufactured pipes at the mega power project site of the customer M/s CGPL and the handing charges are included in the price of the said pipes. Besides it is the appellant who is required to undertake transportation of the said huge pipes and unload it at the customer s premises - the place of delivery ought to be considered as premises of the Customer. The appellants are thus eligible to Cenvat Credit of the Service Tax paid on handling charges at the premises of the customer which was denied to them considering the place of removal as the factory gate - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Admissibility of Cenvat Credit on handling charges beyond the place of removal.

Analysis:
The appeal was filed against an order passed by the Commissioner of Central Excise and Service Tax, which confirmed a demand notice for recovery of Cenvat Credit availed on handling charges of pipes supplied to a customer. The appellant contended that as per the agreement with the customer, the place of delivery was at the customer's premises, making them eligible for Cenvat Credit. The Tribunal examined the agreement conditions and noted that the appellant was responsible for transportation and unloading of the pipes at the customer's site, where handling charges were included in the price of the pipes. Citing precedents and observations from previous cases, the Tribunal held that the place of delivery should be considered as the customer's premises. The Tribunal emphasized that the inclusion of freight in the assessable value was not a relevant factor for determining Cenvat Credit eligibility. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief, if any, as per the law.

In conclusion, the Tribunal ruled in favor of the appellant, allowing them to avail Cenvat Credit on the Service Tax paid on handling charges at the customer's premises, contrary to the initial denial based on the place of removal being considered as the factory gate. The judgment highlighted the importance of contractual agreements and the responsibility of the manufacturer in determining the place of delivery for the purpose of Cenvat Credit eligibility.