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2017 (11) TMI 250 - AT - Central ExciseCENVAT credit - input services - place of removal - outwards transportation services - Department was of the view that the said services would not qualify as input service since the buyer s premises cannot be considered a place of removal - whether the appellants are eligible for cenvat credit of outward transportation charges beyond the factory gate and upto the place of removal? - Board Circular No.97/8/2007-ST dt. 23.8.2007 - Held that - from the clarifications issued by the Board, it is seen that in cases where the ownership of the goods remains with the seller, till it is delivered to the buyer s premises, assessee would be eligible for taking cenvat credit on outward transportation services - also, reliance placed in the decision in the case of M/s Madras Cements Ltd Versus The Additional Commissioner of Central Excise, The Commissioner of Central Excise (Appeals-I) 2015 (7) TMI 1001 - KARNATAKA HIGH COURT , where it was held that Since we are of the opinion that the sale had concluded only after the delivery of the goods was made at the address of the buyer, in the facts of the present case assessee would be entitled to the benefit of CENVAT credit on Service Tax paid on outward transportation of goods by the assessee even after 01.04.2008 - appeal allowed - decided in favor of appellant.
Issues involved:
1. Eligibility of cenvat credit on outward transportation charges beyond the factory gate and up to the place of removal. Detailed Analysis: 1. The issue in all the appeals was whether the appellants are entitled to cenvat credit on outward transportation charges beyond the factory gate up to the place of removal. The department contended that such credit is not admissible as the buyer's premises cannot be considered as the place of removal. The original authority and Commissioner (Appeals) upheld the denial of credit, leading to the appeals. 2. In the first set of appeals (E/41801 to 41804/2017), the appellants availed cenvat credit on outward transportation services of finished goods to the customer's premises. The department argued that the buyer's premises do not qualify as a place of removal. The appellant's counsel highlighted the purchase order specifying F.O.R. Destination as the condition of sale. 3. In the subsequent appeals, similar issues arose where the appellants availed credit on outward transportation for clearance of finished goods to the buyer's premises. The department denied the credit, stating that the buyer's premises cannot be considered as a place of removal. The appellants' counsel presented evidence from the appeal paper book to support their claim of eligibility for credit. 4. Further appeals involved the denial of credit on service tax paid for outward transportation of finished goods to the buyer's premises. The department issued show cause notices proposing to disallow the credit, leading to confirmation of demand, interest, and penalties by the original authority and Commissioner (Appeals). The appellants' representatives referenced various documents to demonstrate that the goods were delivered on F.O.B. Destination, highlighting the element of indemnity resting on the appellants until delivery. 5. The last appeal pertained to the denial of cenvat credit on service tax paid for GTA services for outward transportation of finished goods to customers. The department contended that such credit was inadmissible beyond the factory gate. The appellant's consultant referred to precedents and a decision by the Hon'ble High Court of Karnataka to support the eligibility for credit on outward transportation services. 6. After hearing both sides, the Tribunal analyzed the issue of eligibility for cenvat credit on outward transportation charges. Referring to a circular by the Board and various precedents, the Tribunal concluded that if the ownership of goods remains with the seller until delivery at the buyer's premises, the assessee is eligible for cenvat credit on outward transportation services. The Tribunal cited multiple cases where such eligibility was upheld, setting aside the impugned orders and allowing the appeals with consequential benefits as per law.
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