2022 (6) TMI 702 - AT - Central Excise

CENVAT credit - input services - outward transportation - place of removal - denial of cenvat credit on outward transportation only on the basis of Hon ble Supreme Court judgement in the case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX VERSUS ULTRA TECH CEMENT LTD. 2018 (2) TMI 117 - SUPREME COURT , where it was held that Cenvat Credit on goods transport agency service availed for transport of goods from place of removal to buyer s premises was not admissible to the respondent - HELD THAT - Subsequent to this Apex Court judgement, this Tribunal considering the issue of Cenvat on outward transportation in the case of M/S SANGHI INDUSTRIES LTD. VERSUS C.C.E. KUTCH (GANDHIDHAM) 2019 (2) TMI 1488 - CESTAT AHMEDABAD held that cenvat credit is admissible, relying on the Board Circular which was issued subsequent to the Hon ble Supreme Court judgement. This subsequent development on the legal issue has not been considered by the lower authorities. Further, the documents shown by the Learned Counsel such as purchase orders, invoices, Chartered Accountant Certificate, clearly shows that the prices are FOR price which is inclusive of freight, Insurance etc. and on such price excise duty was charged, if it is so, then the appellant shall be entitled for cenvat credit, however, the facts regarding the FOR price and sale of goods have not been properly verified by the lower authorities, therefore, this aspect needs to be relooked. Appeal allowed by way of remand.

Summary

Issues involved:
- Entitlement for cenvat credit in respect of outward transportation.

Analysis:
The issue in this case revolves around the entitlement of the appellant for cenvat credit concerning outward transportation. The appellant's counsel argued that the lower authorities denied the credit solely based on a Supreme Court judgment in the case of Ultratech Cement Ltd. The counsel pointed out subsequent judgments by the Tribunal in the cases of Ultratech Cement and Sanghi Industries, where it was held that cenvat credit is admissible for outward transportation. The appellant supplied goods on a "FOR" basis, where the price charged to the customer included insurance, freight, etc., and excise duty was charged on this price. The Tribunal noted that the lower authorities did not consider these subsequent developments, including a Board Circular issued after the Supreme Court judgment. The documents presented by the appellant's counsel supported the claim that the prices were FOR prices inclusive of freight and insurance, on which excise duty was charged. Therefore, the Tribunal held that if these facts are verified, the appellant would be entitled to cenvat credit based on the judgments in the cases of Ultratech Cement and Sanghi Industries, which were upheld by the Jurisdictional High Court of Gujarat. However, the lower authorities failed to properly verify the facts regarding the FOR price and sale of goods, necessitating a relook in line with the Gujarat High Court judgments. Consequently, the impugned order was set aside, and the appeal was allowed for remand to the original authority.