2016 (8) TMI 982 - AT - Central Excise

Cenvat credit - Cargo Service and Courier service for despatch of finished goods - Held that - during the hearing, the appellant placed reliance on the judgement of this Tribunal in the case of CCE Vs. Lucas TVS and others reported in 2016 (4) TMI 189 - CESTAT CHENNAI , in which many matters have been remanded to the original authority. This judgment being no different from the issue decided by this Tribunal, this matter is also remanded to the original authority to re-examine the issue in the light of the direction given in the aid judgement. Accordingly, the appeal is remanded to the adjudicating authority to dispose of the matters after taking into account the legal aspects and after affording an opportunity of hearing to prove the appellant s eligibility of credit. Since these issues are purely interpretative in nature and in the final order referred to by the learned counsel penalty has been set aside, penalty in the instant case is also set aside and the matter is remanded to the original authority to decide the case afresh on the eligibility of cenvat credit. - Appeal allowed by way of remand

Summary

Issues involved:
1. Denial of Cenvat credit on Cargo Service and Courier service for despatch of finished goods.
2. Challenge to the denial of credit before appellate authorities.
3. Interpretation of eligibility for credit on carton service and courier service.
4. Application of legal precedents in determining eligibility for Cenvat credit.

Analysis:

1. The appellant, a manufacturer of automobile parts, faced a Show Cause Notice challenging the Cenvat credit taken on Cargo Service and Courier service for despatch of finished goods. The Additional Commissioner disallowed the credit, leading to an appeal before the Ld. Commissioner (Appeal) who upheld the decision. The appellant contested the order before the Tribunal, arguing the validity of the credit.

2. The Ld. Counsel for the appellant presented sample purchase orders to support their case, emphasizing the terms related to delivery and insurance of goods in transit. The appellant contended that most purchase orders were valid, indicating that insurance was borne by customers. Reference was made to relevant legal provisions and circulars to strengthen the argument for eligibility of credit.

3. On the other hand, the Ld. AR argued that the appellant had paid the entire demand along with interest and a portion of the penalty but continued to contest the matter before the appellate authorities. The eligibility for Cenvat credit was questioned, emphasizing the correctness of the denial by the adjudicating authority.

4. The Tribunal considered the arguments from both sides and noted that the appellant had challenged the denial of credit before the lower authorities. The key issue revolved around the eligibility of the appellant for credit on carton service and courier service. Referring to legal precedents, the Tribunal remanded the matter to the original authority for re-examination in line with specific directions, setting aside the penalty. The appeal was allowed by remanding the case for a fresh decision on the eligibility of Cenvat credit.

In conclusion, the Tribunal's judgment focused on the interpretation of the eligibility for Cenvat credit on specific services, emphasizing the need for a re-examination by the original authority in light of legal precedents. The decision highlighted the importance of legal aspects and the opportunity for the appellant to prove their eligibility for credit, ultimately setting aside the penalty and remanding the case for further consideration.