2021 (12) TMI 729 - AT - Central Excise

Reversal of CENVAT Credit - Outward GTA services availed on supplying goods on FOR basis to various clients - place of removal - HELD THAT - The issue at hand has been decided by this tribunal in the case of M/S ULTRATECH CEMENT LTD. VERSUS C.C.E. KUTCH (GANDHIDHAM) 2019 (2) TMI 1487 - CESTAT AHMEDABAD where it was held that as the ownership of the goods remained with the Appellants till the goods reached to the customer s doorstep and the freight charges as well as damage (insurance) to the goods till destination were borne by the Appellant, they are eligible for the credit of service tax paid by them on outward freight. The appellant have claimed that the facts are identical in the instant case in so far as the goods are delivered on FOR basis and ownership of goods is transferred only on buyers premises - The adjudicating authority can go into the facts and if it is found that the contract is of supply is on FOR basis and the ownership of the goods is transferred at the buyer s premises then the benefit of the credit may be allowed. Appeal allowed by way of remand.

Summary

Issues: Admissibility of Cenvat Credit on Outward GTA services availed on supplying goods on FOR basis to various clients.

In this case, the appellant, Shri Khemisati Polusacks Pvt Ltd, filed an appeal against the order demanding the reversal of Cenvat credit, interest, and imposition of a penalty. The learned counsel argued that the issue revolves around the admissibility of Cenvat Credit on Outward GTA services availed for supplying goods on FOR basis to clients. She highlighted that in a previous case of the appellant, the adjudicating authority had allowed the benefit after reviewing various supply contracts, which was accepted by the revenue. Reference was made to a tribunal decision in the case of M/s. ULTRATECH CEMENT LTD v/S. COMMISSIONER OF CENTRAL EXCISE, KUTCH, where similar relief was granted. It was emphasized that the ownership of goods remained with the appellant until delivery at the buyer's premises in all cases.

The Authorized Representative relied on the impugned order. The tribunal, in the case of M/S. ULTRATECH CEMENT, addressed the issue of excise duty paid on freight exceeding the Cenvat credit on outward GTA. The tribunal found merit in the appellant's argument and acknowledged the applicability of Circulars dated 22.12.2014 and 23.08.2007, even after their withdrawal. The tribunal also noted the ongoing litigation regarding outward GTA under the Cenvat Credit Rules, emphasizing that no malafide intention could be attributed to the appellant. Consequently, the benefit of the Circulars was deemed available during the relevant period. The tribunal allowed the appeal by way of remand, directing the adjudicating authority to examine the facts and determine if the supply contracts were on FOR basis and if ownership of goods was transferred at the buyer's premises, in line with previous decisions and assertions made by the appellant.

In conclusion, the tribunal allowed the appeal by way of remand, permitting the adjudicating authority to investigate the facts and potentially allow the benefit of Cenvat credit if the supply contracts were found to be on FOR basis and ownership of goods was transferred at the buyer's premises.