2021 (9) TMI 692 - AT - Central Excise

CENVAT Credit - input services - Goods Transport Agency Service for dispatching their finished goods - outward transportation on FOR destination basis - place of removal - premises of the buyer or factory gate of the buyer - HELD THAT - In the facts and circumstances of this case, the place of removal is the premises of the buyer, not the factory gate of the buyer, as the finished goods are cleared by the appellant on FOR destination basis . The appellant is entitled to cenvat credit on the GTA service for outward transportation of the goods on FOR destination basis - CENVAT credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Whether the appellant is entitled to cenvat credit of service tax paid for availing Goods Transport Agency Service for despatching finished goods on FOR destination basis to buyers.

Analysis:
The issue in this appeal revolves around the entitlement of the appellant, M/s. Hindustan Zinc Ltd., to cenvat credit of service tax paid for utilizing Goods Transport Agency Service for outward transportation of finished goods on FOR destination basis to their buyers. The appellant, as per the show cause notice, has paid the GTA charges for the services and claimed cenvat credit on the tax amount charged in the invoice for transportation. The Revenue contends that the 'place of removal' is the factory gate, not the premises of the buyer. However, the appellant argues that they have paid excise duty on the basic sale price, which includes transportation up to the buyer's premises, entitling them to the cenvat credit of the disputed GTA service.

The Authorized Representative for Revenue relied on the impugned order and referred to the definition of 'place of removal' under Section 4(3)(c) and 4(3)(cc), along with Circular No.1065/4/2018-CX. The Circular highlighted that cenvat credit is generally allowable concerning the 'place of removal' on outward transportation, citing judgments of the Hon'ble Supreme Court for guidance. The Tribunal, after considering the contentions, held that in this case, the 'place of removal' is the premises of the buyer, not the factory gate, as the goods are cleared on 'FOR destination basis.' Consequently, the appellant was deemed entitled to cenvat credit on the GTA service for outward transportation on FOR destination basis, leading to allowing the appeals, setting aside the impugned order, and granting consequential benefits to the appellant in accordance with the law.