2021 (12) TMI 578 - AT - Central Excise

CENVAT Credit - input services - GTA Services - denial on the sole ground that the appellant have not supplied the CAS4 Certificate to ascertain the cost of product - inclusion of freight element in assessable value or not - HELD THAT - The sale of the goods is on Principle to Principle basis. As per Section 4 of the Central Excise Act, 1944 the transaction value at which the goods are sold has to be taken for the purpose of assessment. In case of the value arrived at, as per Section 4(1)(a) no question can be raised. Moreover, in the facts of the present case the freight is deemed to have been included in the assessable value and on such assessable value excise duty was charged which is evident from the sale invoice which shows that the appellant have not collected the freight separately from the customer. The freight charge was borne by the appellant themselves. In this case the transaction should be considered as FOR sale and accordingly, the buyer s place shall become place of removal as all the expenses up to the delivery of the goods at the buyer s place was borne by the appellant. It can be seen in the case of M/S. SALASAR COPPER VERSUS COMMISSIONER OF CENTRAL EXCISE ST, DAMAN 2019 (4) TMI 11 - CESTAT AHMEDABAD that on the basis of CA Certificates produced by the appellant regarding the nature of sale i.e. FOR Sale and also the inclusion of freight charge, this tribunal has taken a view that appellant is entitle for Cenvat Credit - In the present case also there is no dispute that the appellant have produced the CA Certificate wherein, it was certified that the sale is on FOR Basis and the freight is included in the sale value accordingly, the facts of the present case as well as the case cited are identical. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether the appellant is entitled to Cenvat Credit in respect of GTA services.

Analysis:
The appellant contended that the denial of Cenvat Credit by the lower authorities was based on the absence of a CAS-4 Certificate to justify the cost of the final product and ascertain if the freight element was included. They argued that the freight charges were borne by them and deemed to be included in the sale value of the goods. Referring to previous tribunal decisions upheld by the High Court, they claimed entitlement to the credit. On the other hand, the revenue representative reiterated the findings of the impugned order, emphasizing that Cenvat Credit for GTA services is only eligible up to the place of removal, which, in this case, was the factory gate. Several judgments were cited to support this position.

The Member (Judicial) carefully considered the submissions and records. It was observed that the lower authorities denied the credit due to the absence of the CAS-4 Certificate. However, as per Section 4 of the Central Excise Act, the transaction value at which goods are sold should be considered for assessment. In this case, the freight was deemed included in the assessable value, as evidenced by invoices showing no separate freight charges collected from customers. The tribunal previously allowed Cenvat Credit on Outward GTA in similar cases, upheld by the High Court, indicating that the appellant should be entitled to the credit in the present case as well. Additionally, a previous judgment in the appellant's favor was cited, where CA Certificates confirmed the nature of sale as FOR basis with included freight charges.

Referring to the previous judgment, the Member highlighted that based on CA Certificates and the nature of sale being FOR basis with included freight charges, the tribunal allowed Cenvat Credit. Since the facts of the present case were similar, the impugned order was set aside, and the appeal was allowed. Consequently, the appeal filed by the appellant was also allowed.

In conclusion, the judgment ruled in favor of the appellant, granting them entitlement to Cenvat Credit for GTA services based on the inclusion of freight charges in the sale value and the nature of the sale being on FOR basis, as confirmed by CA Certificates.