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2021 (10) TMI 89 - AT - Central ExciseCENVAT Credit - input services - Courier Service which is used for dispatching documents relating to business and manufacturing samples - place of removal - FOR basis - denial on the premise that any service used beyond the place of removal is not admissible input service - HELD THAT - On careful reading of definition of Input Service, it is found that only those services which were used for removal of goods from the place of removal not admissible input service - In the present case, the courier service used for dispatch of documents, hence the reasoning of the Revenue is not relevant. Therefore, credit on courier service relates to dispatch of documents being the service relating of overall activity of a business, is clearly admissible. Courier Service for dispatch of manufacturing samples - HELD THAT - Since the sale is on FOR basis Courier charges are included in the sale price on which excise duty was paid, the appellant is entitled for Cenvat credit as held by this Tribunal in the case of M/S SANGHI INDUSTRIES LTD. VERSUS C.C.E. KUTCH (GANDHIDHAM) 2019 (2) TMI 1488 - CESTAT AHMEDABAD and M/S ULTRATECH CEMENT LTD. VERSUS C.C.E. KUTCH (GANDHIDHAM) 2019 (2) TMI 1487 - CESTAT AHMEDABAD which was upheld by Hon ble Gujarat High Court in THE COMMISSIONER, CENRTAL GOODS AND SERVICE TAX VERSUS M/S. ULTRATECH CEMENT LTD. 2020 (3) TMI 1206 - GUJARAT HIGH COURT . Accordingly, the appellant is entitled for Cenvat credit in respect of Courier Service used for dispatch of documents as well as for dispatch of excisable goods as samples. Appeal allowed - decided in favor of appellant.
Issues: Entitlement to Cenvat credit for Courier Service used for dispatching documents and manufacturing samples.
Analysis: The judgment by the Appellate Tribunal CESTAT Ahmedabad dealt with the issue of whether the appellant is entitled to Cenvat credit for Courier Service utilized in dispatching documents related to business and manufacturing samples. The appellant argued that the Courier Service was essential for overall business activities and the removal of manufacturing samples. They contended that the Courier Service used for dispatching documents should be considered admissible as it is crucial for business operations. Additionally, they highlighted that the manufacturing samples were cleared on payment of duty on FOR basis, making them eligible for Cenvat credit as per previous judgments. The Revenue, represented by the Superintendent (AR), reiterated the findings of the impugned order, which denied Cenvat credit on the Courier Service. The department's stance was that any service used beyond the place of removal is not considered an admissible input service. However, upon careful examination of the definition of Input Service, the Tribunal found that only services used for the removal of goods from the place of removal are considered inadmissible. In this case, since the Courier Service was used for dispatching documents essential for business activities, the reasoning of the Revenue was deemed irrelevant. The Tribunal further considered the argument regarding the manufacturing samples cleared on FOR basis, where the freight was borne by the appellant. Citing precedents such as the case of Sanghi Industries Limited and Ultratech Cement Limited, the Tribunal concluded that since the sale was on FOR basis and Courier charges were included in the sale price on which excise duty was paid, the appellant was entitled to Cenvat credit for the Courier Service used for dispatching documents and manufacturing samples. Consequently, the impugned order was set aside, and the appeal was allowed, granting the appellant the Cenvat credit they sought for the Courier Service utilized in their business operations. In conclusion, the judgment clarified the admissibility of Cenvat credit for Courier Service used for dispatching documents and manufacturing samples, emphasizing the importance of the services in the overall business activities and the clearance of goods on FOR basis as key factors in determining eligibility for such credit.
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