2017 (12) TMI 486 - AT - Central Excise

CENVAT credit - GTA Services - FOR basis - Held that - reliance placed in the case of M/s Kelvin Plastics Pvt Ltd Versus Commissioner of Central Excise, Rajkot 2017 (9) TMI 141 - CESTAT AHMEDABAD where it was held that the admissibility of CENVAT Credit on GTA Service (outward freight) rests on the condition of sale - the factual matrix as to whether the goods were delivered on FOR basis or otherwise needs to be ascertained from the documents, the matter is remitted to Adjudicating Authority to do the same - appeal allowed by way of remand.

Summary

Issues involved:
Availment of Cenvat Credit of Service Tax Paid on GTA Services by consigners.

Analysis:
The issue in these appeals pertains to the availment of Cenvat Credit of the Service Tax Paid on GTA Services by the appellants as consigners. The Revenue argues that the appellants' availment of Cenvat Credit is incorrect as there is no concrete evidence to prove that the goods were dispatched on FOR basis. On the other hand, the appellants claim that the transactions were indeed based on FOR basis. The lower authorities concluded that the goods were delivered at the factory gate based on the conditions of sale mentioned in the invoices of the appellant. However, the Tribunal finds that the lower authorities have misinterpreted the law and the Board's circular in this regard.

The Tribunal refers to a previous case involving M/s Subhalakshmi Polyester Ltd to establish the legal position on the admissibility of Cenvat Credit on GTA Services. It is noted that the admissibility of credit depends on the condition of sale, where if the burden of delivering the goods at the buyer's premises lies with the manufacturer, then the Cenvat Credit of Service Tax paid on outward freight is admissible. The Tribunal emphasizes that the inclusion of the freight element in the assessable value is not a relevant factor for considering the eligibility of Cenvat Credit. The Tribunal also highlights that the conditions of sale mentioned on the face of the invoices are general and may vary, necessitating a thorough examination of the documents to determine whether the goods were delivered on FOR basis.

Based on the above legal principles, the Tribunal remits the matter to the Adjudicating Authority to ascertain the factual matrix regarding the delivery of goods on FOR basis. The Tribunal directs the lower authorities to determine the exact amount of Cenvat Credit that can be availed by the appellant based on the principles of eligibility to Cenvat Credit as established in previous tribunal judgments. Ultimately, the appeals are disposed of in light of the above analysis and directions provided to the Adjudicating Authority for further examination.