2017 (11) TMI 813 - AT - Central Excise

CENVAT credit - input service - courier service received for the purpose of transporting of the final product Electronic Weighing Machine from the factory to the customer s premises during the relevant periods - Held that - it has been consistently held in various decisions that if the place of removal is customers premises, then the assessee will be entitled to take CENVAT credit on GTA services - To verify whether the goods are valued under Section 4A and all the sales are on FOR basis, these cases need to be remanded to the original authority - appeal allowed by way of remand.

Summary

Issues:
- Admissibility of CENVAT credit on service tax paid on courier services for transportation of goods
- Interpretation of input service under Rule 2(l)(ii) of the CENVAT Credit Rules, 2004
- Application of precedent decisions on CENVAT credit eligibility
- Verification of goods valuation under Section 4A of the Central Excise Act, 1944 for sales on FOR basis

Analysis:

The judgment pertains to three appeals filed against orders rejecting CENVAT credit on service tax paid for courier services used in transporting goods. The appellants, engaged in manufacturing electronic weighing machines, parts, and electronic cash registers, claimed the credit under CENVAT Credit Rules, 2004. The Department contended that the services did not qualify as input services under Rule 2(l)(ii) of the CCR. Show-cause notices were issued, leading to demands, interest, and penalties. The Commissioner(Appeals) upheld the Orders-in-Original, prompting the appeals.

During the hearing, the appellant's consultant argued that the impugned orders disregarded submissions and binding precedents, emphasizing the broad interpretation of input service. He cited precedents and Board circulars to support the claim that the courier charges were admissible. The consultant referenced decisions like Ambuja Cements Ltd. Vs. UOI and others to strengthen the argument for credit eligibility based on ownership of goods until delivery at the customer's premises.

On the contrary, the learned AR supported the findings of the impugned order, setting the stage for the Tribunal's analysis. After reviewing submissions, precedents, and records, the Tribunal acknowledged that the goods were supplied through courier to the buyer's premises. Citing consistent precedents, the Tribunal noted that if the place of removal is the customer's premises, CENVAT credit on GTA services is permissible. To verify the goods' valuation under Section 4A and sales on FOR basis, the cases were remanded to the original authority. The appellant was directed to provide evidence supporting sales on FOR basis, and the original authority was tasked to reevaluate and pass a fresh order within two months.

In conclusion, the Tribunal allowed all three appeals for remand to reassess the eligibility of CENVAT credit on courier services based on the valuation of goods under Section 4A and sales on FOR basis, in line with the precedents cited during the proceedings.