2017 (12) TMI 233 - AT - Central Excise

Liability of central excise duty - delivery charges of liquid gas - CENVAT credit availed on ISD invoices - Held that - After the return of the tanker from the customer premises, the provisional entry made at the time of initial clearance, was adjusted and the duty was actually paid as per the actual quantity. Since the buyer pays only for the quantity of gases delivered at their premise and the burden of transit loss and any other loss was on the appellant, it was held that the sale of goods takes place only at the buyer s premises - the facts of the present case require re-examination by the original authority with reference to purchase order, terms of sale, etc. - matter on remand. CENVAT credit availed on ISD invoices - Held that - the original authority has denied the credit without any examination of the nature of services and also the various submissions made by the appellant in their defence - the appellant that the original authority has failed to give reasoned findings before denying the credit - matter requires de novo examination. Appeal allowed by way of remand.

Summary

Issues:
Liability to pay Central Excise duty on delivery charges of liquid gas and correctness of denial of Cenvat credit availed on ISD invoices.

Liability to pay Central Excise duty on delivery charges:
The appeal focused on whether the appellant is liable to pay Central Excise duty on delivery charges of liquid gas. The original authority considered the special procedure for removal of liquid gases and concluded that the sale of goods takes place only at the buyer's premises, justifying the inclusion of delivery charges in the assessable value for Central Excise duty. The appellant argued that delivery charges are transport charges and should not be included in the assessable value. The Tribunal referred to the decision in Ispat Industries Limited by the Supreme Court, emphasizing the scope of "place of removal" and the importance of where goods are sold by the manufacturer. The Tribunal held that the original authority should re-examine the facts to determine if the sale is ex-factory based on supporting documents like purchase orders and terms of sale.

Correctness of denial of Cenvat credit on ISD invoices:
The second issue revolved around the denial of Cenvat credit availed based on ISD invoices. The appellant contended that the impugned order did not thoroughly examine each type of input service and the nature of the documents before denying the credits. The Tribunal agreed with the appellant, noting that the original authority failed to provide reasoned findings for denying the credit of a specific amount availed by the appellant. The Tribunal set aside the order on this issue, remanding the matter for a fresh decision by the original authority in line with their observations.

The Tribunal, after hearing both sides and examining the appeal records, concluded that the original authority's decisions on both issues lacked thorough analysis and reasoned findings. As a result, the Tribunal allowed the appeal on these limited issues by setting aside the order and remanding the matter for a fresh decision. The judgment emphasized the importance of detailed examination and reasoned findings in determining Central Excise duty liability and Cenvat credit availed on ISD invoices.