2019 (6) TMI 1017 - AT - Central Excise

CENVAT Credit - input services - courier services - 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 fact, for any inter state sale, C.S.T. is required to be charged by any seller of the goods. By charging C.S.T. does not make the goods are sold at the factory gate. In fact, we have to see that in terms of the CBCE Circular No. 10654/4/2018 dt. 08.06.2018, what is the place of removal. 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 - 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 - the appellant is entitled to avail the Cenvat credit on courier service. Credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Denial of Cenvat credit on courier service for selling goods at factory gate.

Analysis:
The appellant appealed against the denial of Cenvat credit on courier service for selling goods at their factory gate. The appellant argued that until the goods reach the buyer's place, they remain the owner of the goods, and if the buyer refuses delivery, the goods are returned to them. Referring to a CBCE Circular, the appellant claimed entitlement to the Cenvat credit. On the contrary, the Authorized Representative contended that since the appellant sells goods at the factory gate by delivering them through courier and charging C.S.T., they are not eligible for the credit. The dispute centered on whether charging C.S.T. implies delivery at the factory gate. The Tribunal considered the arguments and the CBCE Circular, emphasizing that charging C.S.T. does not necessarily mean goods are sold at the factory gate. The Tribunal noted that for interstate sales, C.S.T. must be charged, and the place of removal must be determined as per the Circular. In this case, the goods were sold via courier, and until delivery to the buyer, the appellant retained ownership. If the buyer rejected delivery, the courier returned the goods to the appellant. Consequently, the Tribunal ruled that the goods were delivered at the buyer's place, making it the place of removal. Therefore, the appellant was deemed eligible for Cenvat credit on the courier service, leading to the setting aside of the impugned orders and allowing the appeals with any consequential relief.

Conclusion:
The judgment resolved the issue of denial of Cenvat credit on courier service due to goods being sold at the factory gate. By interpreting the CBCE Circular and considering the ownership and delivery aspects, the Tribunal determined that the appellant was entitled to the credit as the goods were delivered at the buyer's place. The decision set aside the previous orders and allowed the appeals with any necessary relief.