2019 (7) TMI 561 - AT - Central Excise

CENVAT Credit - input services - outward transportation of goods upto the buyer s premises - place of removal - HELD THAT - The purchase orders state that one of the terms and conditions for sale is that the goods have to be delivered at the customer s place understanding that the buyer s premise is the place of removal. The appellants have also included the freight charges in the assessable value while discharging excise duty. As per the decision in COMMISSIONER, CUSTOMS AND CENTRAL EXCISE, AURANGABAD VERSUS M/S ROOFIT INDUSTRIES LTD. 2015 (4) TMI 857 - SUPREME COURT , the place of removal can only be buyer s premises - The Hon ble Apex Court in the case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX VERSUS ULTRA TECH CEMENT LTD. 2018 (2) TMI 117 - SUPREME COURT has held that credit on outward transportation would be eligible upto the place of removal. In the present case, the place of removal being buyer s premises, the appellants are eligible for credit. The disallowance of credit is unjustified - appeal allowed - decided in favor of appellant.

Summary

Issues:
Eligibility of credit on outward transportation of goods up to the buyer's premises.

Analysis:
The case involved the appellants, engaged in manufacturing automobile brake lining, who availed credit of service tax paid on outward transportation of goods up to the buyer's premises. The department alleged the credit was ineligible, leading to a Show Cause Notice proposing disallowance, recovery, interest, and penalties. The original authority confirmed the demand and interest but set aside the penalties. The Commissioner (Appeals) upheld the demand and interest but annulled the penalties, prompting the appeals.

The appellant argued that they availed GTA services for transporting goods to the buyer's premises based on F.O.R basis sale terms in purchase orders, thus including freight charges in the assessable value for excise duty. They contended the place of removal was the buyer's premises, not the factory gate as assumed by the department. Citing the decision in Roofit Industries Ltd. and recent Tribunal rulings, the appellant asserted eligibility for credit.

The department, represented by Ld. A.R Shri B. Balamurugan, supported the impugned order findings. After hearing both sides, the issue centered on the eligibility of credit on outward transportation of goods up to the buyer's premises. The Tribunal analyzed the purchase orders, noting the requirement to deliver goods at the customer's place, establishing the buyer's premises as the place of removal. Referring to legal precedents, including Roofit Industries Ltd. and CCE Vs Ultratech Cement Ltd., the Tribunal concluded that the appellants were eligible for credit. The Tribunal cited a case involving Genau Extrusions Ltd. to support its decision, emphasizing the importance of purchase order terms and evidence in determining credit eligibility.

Ultimately, the Tribunal found the disallowance of credit unjustified, setting aside the impugned orders and allowing the appeals with any consequential benefits as per the law. The judgment highlighted the significance of contractual terms, purchase orders, and legal precedents in determining the eligibility of credit on outward transportation of goods up to the buyer's premises, providing a comprehensive analysis and legal reasoning for the decision.