2021 (4) TMI 346 - AT - Central Excise

CENVAT Credit - input services - outward transportation of goods from the factory/bulk terminal/depot to their customer s premises - place of removal - case of Revenue is that the place of removal will always be factory gate and the assessee is not entitled to cenvat credit on GTA up to the buyer s premises - HELD THAT - On an identical issue, this Tribunal in the case of BHARAT FRITZ WERNER LTD. VERSUS COMMISSIONER OF CENTRAL TAX, BANGALORE NORTH WEST COMMISSIONERATE 2019 (11) TMI 1050 - CESTAT BANGALORE has remanded the case back to the original authority to pass a fresh order after examining various documents for the disputed period. The case remanded back to the original authority to pass a fresh order after examining the various documents for the disputed period - appeal allowed by way of remand.

Summary

Issues:
- Availment of cenvat credit on outward transportation beyond the place of removal
- Interpretation of the definition of 'place of removal'
- Applicability of relevant legal provisions and circulars

Analysis:
1. Availment of cenvat credit on outward transportation beyond the place of removal:
The case involved a dispute regarding the appellant's entitlement to cenvat credit on service tax paid for outward transportation of goods beyond the place of removal. The Department contended that the appellant wrongly availed cenvat credit beyond the permissible limit. The original authority confirmed the demand for cenvat credit along with interest and penalty. The appellant challenged this decision, arguing that they were eligible for cenvat credit up to the customer's premises based on the definition of 'place of removal' and 'input service' under the Cenvat Credit Rules. The appellant also cited relevant legal precedents to support their claim.

2. Interpretation of the definition of 'place of removal':
The appellant's counsel argued that if goods are sold from a place other than the factory gate, the 'place of removal' should be considered as the buyer's premises. They emphasized that the freight charges formed an integral part of the goods' price, supporting their position with references to legal definitions and court decisions. The Tribunal noted that similar issues had been addressed in previous cases, including one involving Bharat Fritz Werner Ltd., where the matter was remanded back to the original authority for reevaluation based on a Board Circular.

3. Applicability of relevant legal provisions and circulars:
The respondent, represented by the learned AR, relied on a Supreme Court decision in the Ultratech case, which clarified that post-amendment in 2008, the 'place of removal' would be the factory gate. However, it was acknowledged that a subsequent Board Circular prompted the Tribunal to remand cases for further examination. The Tribunal, after considering arguments from both parties and reviewing relevant judgments and circulars, decided to remand the present case back to the original authority for a fresh assessment in line with the Circular issued by the Board in 2018. The Tribunal's decision was based on the need to verify factual aspects such as the nature of the sale, the integration of freight charges in the sale price, and the duty paid on the total value inclusive of freight.

In conclusion, the Tribunal set aside the impugned order and remanded the case for a fresh assessment, aligning with the legal principles and circulars governing the availment of cenvat credit on outward transportation of goods. The decision highlighted the importance of examining specific factual aspects in determining the eligibility for such credit, emphasizing compliance with legal provisions and circulars issued by the relevant authorities.