2019 (6) TMI 942 - AT - Central Excise

CENVAT Credit - input services - courier service - credit denied on the ground that the appellant is selling the goods at their factory gate, therefore, for the courier service, they are not entitled to avail the Cenvat credit - HELD THAT - In this case, the goods were sold through courier and till the goods are delivered to the buyer, the appellant is the owner of the goods, as in case, buyers refuse to take the delivery of the goods, it is the duty of the courier to return back the goods to the appellant. In that circumstance, the goods have been delivered by the appellant at buyer s place and the place of buyer is the place of removal in facts and circumstances of the case. Therefore, the appellant is entitled to avail the Cenvat credit on courier service. Credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against denial of Cenvat credit on courier service.

Analysis:
The appellant appealed against the denial of Cenvat credit on courier service, arguing that they are entitled to the credit as they are the owners of the goods until delivery to the buyer's place, as evidenced by the CBCE Circular No. 10654/4/2018. On the other hand, the Ld. A.R. contended that since the goods are sold at the factory gate with C.S.T. charged, the appellant is not eligible for the credit. The Tribunal considered the arguments and examined the key issue of whether charging C.S.T. implies delivery at the factory gate. The Tribunal clarified that charging C.S.T. does not necessarily mean the goods are sold at the factory gate, emphasizing the importance of determining the place of removal as per the CBCE Circular. The Tribunal concluded that until the goods are delivered to the buyer, the appellant remains the owner, and if the buyer refuses delivery, the goods are returned to the appellant by the courier. Therefore, the Tribunal held that the goods were delivered at the buyer's place, making the appellant eligible for the Cenvat credit on courier service. Consequently, the impugned orders were set aside, and the appeal was allowed with any consequential relief.

Conclusion:
The judgment clarifies the entitlement of Cenvat credit on courier service, emphasizing the significance of ownership and the place of removal in determining eligibility. The decision provides a clear interpretation of the CBCE Circular and highlights that charging C.S.T. does not automatically signify delivery at the factory gate. The Tribunal's analysis underscores the importance of considering the specific circumstances of each case to ascertain the rightful entitlement to Cenvat credit, ensuring a fair and just outcome based on the facts presented.