2015 (1) TMI 176 - AT - Central Excise

Denial of refund claim - Rule 5 of Cenvat Credit Rules - GTA services - transporting the finished goods upto the port of shipment - Held that - Since the export documents in the instant case clearly show that terms of delivery on payment is upto port on FOB basis - Following decision of Assessee s own previous case 2009 (11) TMI 167 - CESTAT, CHENNAI - Decided in favour of assessee.

Summary

Issues:
Denial of refund under Rule 5 of Cenvat Credit Rules for GTA services availed by the appellant for transporting finished goods up to the port of shipment.

Analysis:
The case involved the denial of a refund under Rule 5 of the Cenvat Credit Rules concerning GTA services used for transporting goods up to the port of shipment. The appellant exported polished granites and sought a refund of unutilized credit. The adjudicating authority initially sanctioned the refund but later disallowed it, citing that the service tax credit amount related to GTA outward transportation service only up to the port of shipment. The appellate authority upheld this decision, stating the appellants failed to prove that the place of removal was the port of shipment other than the factory premises.

During the hearing, the appellant's advocate presented shipping bills and export invoices demonstrating that the terms of delivery were on a Free on Board (FOB) basis. Referring to a previous Tribunal decision in the appellant's favor for a subsequent period, the advocate argued for the refund. The Revenue's representative reiterated the impugned order.

The Tribunal analyzed the case, focusing on the period of dispute from October 2006 to December 2006. Reviewing specific documents, including invoices and shipping bills, it was noted that the terms of delivery were indeed on an FOB basis up to the port of loading. The Tribunal referenced its previous decision in the appellant's case where credit of service tax paid up to the port was allowed. Citing relevant circulars and court judgments, the Tribunal concluded that the appellant met the conditions for refund eligibility, as the price of the exported goods was FOB-based, and the ownership and risk of the goods remained with the appellant up to the port of shipment.

The Tribunal further addressed the clearance made to a 100% Export Oriented Unit (EOU), considering it as an export based on previous decisions. Consequently, the Tribunal set aside the denial of the refund claim and allowed the appeal, emphasizing that the terms of delivery on payment were up to the port on an FOB basis. The impugned order was overturned, and the appeal was granted with any necessary consequential relief.

In summary, the judgment resolved the issue of refund denial under Rule 5 of the Cenvat Credit Rules by establishing the eligibility of the appellant for the refund based on the FOB terms of delivery up to the port of shipment, supported by relevant legal precedents and documentation presented during the proceedings.