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2022 (5) TMI 1245 - AT - Central ExciseCENVAT Credit - inputs/input services - capital goods - outward goods transport service performed beyond place of removal - HELD THAT - Perusing the entire records, it is observed that delivery of goods in the present case from the manufacturer s/appellant s premises is on the FOR basis. The copy of insurance policy is sufficient to hold that till the goods are delivered by the manufacturer to its customers place, the title therein remains vested with the manufacturer/the appellant. The same fact has been certified as correct even by the Statutory Auditors of the appellant in the form of the Chartered Accountants Certificate. There is no document on record produced by the department to falsify both these documents. The property in the goods continued to remain with the appellant/the manufacturer till those goods were delivered at the door step of the appellant. Hence, point of sale in the given circumstances is apparently the door step of the consumer - in appellant s own case in M/S PENSOL INDUSTRIES LIMITED VERSUS COMMISSIONER, CGST CENTRAL EXCISE 2019 (5) TMI 1618 - CESTAT NEW DELHI this Tribunal has already held the outward freight in case of sale on FOR basis to be an amount paid towards an eligible import service. Appeal allowed - decided in favor of appellant.
Issues:
1. Availing Cenvat credit on outward transport service. 2. Interpretation of Rule 2(l) of Cenvat Credit Rules, 2004. 3. Ownership of goods in case of delivery on FOR basis. 4. Application of judicial precedents and circulars in determining eligibility for Cenvat credit. Analysis: Issue 1: Availing Cenvat credit on outward transport service The appellant availed Cenvat credit of service tax on outward goods transport service, which was performed beyond the place of removal. The department issued a Show Cause Notice denying the eligibility of the said service for Cenvat credit, proposing recovery of the credit amount along with penalties. The initial proposal was confirmed in the Order-in-Original, leading to the appellant's appeal before the Tribunal. Issue 2: Interpretation of Rule 2(l) of Cenvat Credit Rules, 2004 The appellant argued that the outward freight service should be considered an eligible input service for Cenvat credit under Rule 2(l) of Cenvat Credit Rules, 2004. They emphasized the ownership of goods remaining with the manufacturer until delivery on a FOR basis, supported by an insurance policy and a Chartered Accountant Certificate. The appellant cited judicial decisions and departmental circulars to support their claim. Issue 3: Ownership of goods in case of delivery on FOR basis The Tribunal observed that the title of goods remained vested with the manufacturer until delivery to customers on a FOR basis, as evidenced by the insurance policy and the Chartered Accountant Certificate. The Tribunal also referred to judicial precedents, including the interpretation of the point of sale under the Sale of Goods Act, to determine the ownership transfer point in the given circumstances. Issue 4: Application of judicial precedents and circulars The Tribunal analyzed various decisions of the Hon'ble Apex Court and the department's circulars to determine the eligibility of the outward freight service for Cenvat credit. Relying on previous Tribunal decisions and judicial precedents related to FOR destination sales, the Tribunal concluded that the appellant was entitled to avail Cenvat credit for the outward transport service. The Tribunal set aside the order under challenge, allowing the appeal and restoring the order passed by the Adjudicating Authority. In conclusion, the Tribunal's detailed analysis of the issues involved, including the interpretation of relevant rules, ownership of goods, and application of judicial precedents and circulars, led to the setting aside of the order under challenge and the allowance of the appeal.
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