2019 (12) TMI 848 - AT - Central Excise

CENVAT credit - input services - GTA services - case of appellant is that sale is on FOR basis, freight amount is inclusive in the assessable value - HELD THAT - Since to decide the admissibility of the Cenvat credit certain facts have to be verified such as whether the sale is on FOR basis, freight is borne by the assessee, whether the freight is included in the assessable value on which the excise duty was discharged and no freight was recovered from the buyer separately, then only the appellant will be eligible for the Cenvat credit on GTA, the matter needs to be reconsidered by verifying the above facts on the basis of the records already submitted/ to be submitted by the appellant, if required - appeal allowed by way of remand.

Summary

Issues: Admissibility of Cenvat credit in respect of GTA services when the sale is on FOR basis.

Analysis:
The issue before the Appellate Tribunal CESTAT AHMEDABAD was the admissibility of Cenvat credit in respect of GTA services when the sale is on FOR basis. The appellant argued that since the freight amount is inclusive in the assessable value, relying on previous Tribunal judgments in the cases of Ultratech Cement Ltd. and Sanghi Industries Ltd., the credit should be allowed. On the other hand, the learned Superintendent (AR) reiterated the findings of the impugned order.

Upon hearing both sides and perusing the records, the Hon'ble Member (Judicial) observed that the issue of admissibility of Cenvat credit in such cases has been extensively discussed in the aforementioned judgments. The decision on the credit eligibility hinges on verifying crucial facts like whether the sale is on FOR basis, if the freight is borne by the assessee, and whether the freight is included in the assessable value on which excise duty was discharged without separate recovery from the buyer. The Tribunal concluded that a thorough examination of these facts is necessary for determining the eligibility for Cenvat credit on GTA services. Consequently, the Tribunal decided to set aside the impugned orders and allowed the appeals by remanding the matter to the adjudicating authority for reevaluation based on the records already submitted or to be submitted by the appellant, if necessary.

In summary, the Tribunal's judgment emphasized the need for a detailed verification of essential facts to ascertain the admissibility of Cenvat credit in cases involving GTA services when the sale is on FOR basis. The decision underscores the importance of examining specific criteria, such as the inclusion of freight in the assessable value and the absence of separate recovery of freight from the buyer, to determine the eligibility for claiming the credit.