2021 (4) TMI 1200 - AT - Central Excise

CENVAT Credit - input services - Outward Transport Service which is used for transportation of goods from the factory of the appellant to their various depots - place of removal - HELD THAT - There is no dispute that in the present case Outward Transportation Service was used for transportation of goods from the factory of the appellant to their own depot. In this case even as per section 4 of the Central Excise Act, the place of removal is the depot and not the factory gate. Moreover, the valuation of goods is on MRP basis. In such circumstances as per the plain reading of the Input Service definition Cenvat Credit on Outward Transportation Services is admissible up to the place of removal. In the present case depot being the place of removal, outward transportation service was used undisputedly up to the place of removal. The appellant are entitled for the Cenvat Credit in respect of the Outward Transportation Service - Credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Whether the appellant is entitled to Cenvat Credit for Outward Transport Service used for goods transportation from the factory to depots.

Analysis:
The issue in this case revolves around the entitlement of the appellant to claim Cenvat Credit for Outward Transport Service utilized for transporting goods from the factory to various depots. The appellant argued that the transportation service in question extended from the factory gate to the depot, which constituted the place of removal. The appellant further contended that since the goods' valuation was based on the Maximum Retail Price (MRP) under section 4A of the Central Excise Act, 1944, the Cenvat credit for outward transportation service related to goods supplied under MRP valuation should be permissible. The appellant relied on precedents such as CCE Vs Ultra Tech Cement Ltd 2020 and Sanghi Industries Ltd Vs CCE 2019, which were upheld by the High Court.

Upon review, the tribunal acknowledged that the outward transportation service was indeed used for transporting goods from the factory to the appellant's depot. The tribunal noted that as per section 4 of the Central Excise Act, the place of removal was considered to be the depot, not the factory gate. Additionally, since the goods' valuation was based on MRP, the tribunal found that the Cenvat Credit for Outward Transportation Services should be allowed up to the place of removal, which, in this case, was the depot. The tribunal found the appellant's argument supported by the precedent cited, making the Cenvat Credit on Outward Transportation Services admissible in this scenario.

Consequently, the tribunal ruled in favor of the appellant, granting them the entitlement to Cenvat Credit for the Outward Transportation Service. The impugned order was set aside, and the appeals were allowed, with the judgment pronounced in open court on 28.04.2021.