2020 (1) TMI 68 - AT - Central Excise

CENVAT Credit - inputs / input services - outward freight charges - outward transportation of the goods upto the buyer s premises - place of removal - HELD THAT - The issue is with regard to the credit availed on finished goods that have been transported and delivered from the factory to the buyer s premises. The said issue has been analyzed by the Tribunal in the case of M/s.Genau Extrusions Ltd. 2019 (7) TMI 325 - CESTAT CHENNAI wherein the Tribunal has taken note of the decision rendered by the Hon ble Supreme Court in the case of M/s.Roofit Industries 2015 (4) TMI 857 - SUPREME COURT as also Board s Circular No.1065/4/2018-CX dt. 08.06.2018 issued by the Board. Appellant has not produced sufficient documents to show that the freight charges have been included in the assessable value. The matter is therefore remanded to the adjudicating authority who shall consider the matter afresh after giving an opportunity of hearing to the appellant - appeal allowed by way of remand.

Summary

Issues:
- Eligibility of cenvat credit on service tax paid on outward freight charges
- Applicability of Board's Circular No. 1065/4/2018-CX and judicial precedents
- Adequacy of evidence regarding inclusion of freight charges in assessable value
- Remand to adjudicating authority for further evidence and consideration

Analysis:
The case involved a dispute regarding the eligibility of cenvat credit on service tax paid on outward freight charges by a manufacturer of motor vehicle parts. The department contended that credit on service tax paid on freight charges for transportation of goods to the buyer's premises was not permissible. Show cause notices were issued for the period from September 2015 to February 2017 and January 2016 to June 2017, leading to the confirmation of demand, interest, and penalty by the original authority and the Commissioner (Appeals).

During the appeal, the appellant's counsel argued citing Board's Circular No. 1065/4/2018-CX and judicial precedents, emphasizing the relevance of including freight charges in the assessable value when delivering goods to the buyer's premises. The appellant sought a remand to establish that the freight charges were indeed included in the assessable value while discharging excise duty, referencing a Tribunal decision in a similar case.

The Tribunal considered the issue in light of the judicial precedents and the Circular, noting that the appellant had not provided sufficient evidence to demonstrate the inclusion of freight charges in the assessable value. In response to the appellant's request, the Tribunal decided to grant a further opportunity to present evidence and remanded the matter to the adjudicating authority for fresh consideration. The adjudicating authority was instructed to consider the case in line with the Tribunal's discussions in a relevant case and the relief granted to the appellants for an earlier period by the Commissioner (Appeals).

Ultimately, the Tribunal set aside the impugned orders and allowed the appeals by way of remand, highlighting the need for additional evidence and a thorough reevaluation by the adjudicating authority.