2018 (2) TMI 212 - AT - Central Excise

CENVAT credit - GTA Services for outward transportation services - whether credit is admissible on outward transportation services upto buyer s premises when delivered on F.O.R. basis? - Held that - the issue has been settled by the decision in the case of Commissioner Versus Ellora Time Ltd. 2014 (3) TMI 567 - GUJARAT HIGH COURT , where it was held that outward transportation would be an input service as covered in the expression means part of the definition, it would be difficult to exclude such service on the basis of any interpretation that may be offered of the later portion of the definition which is couched in the expression includes . However, the documents requires reconsideration by the adjudicating authority to verify whether the said decision is applicable - appeal allowed by way of remand.

Summary

Issues:
1. Admissibility of cenvat credit on outward transportation services.
2. Disallowance of credit, recovery of wrongfully availed credit, interest, and penalty.
3. Interpretation of service tax paid on GTA Services for outward transportation when delivery is on F.O.R basis.
4. Applicability of Board Circular No.999/6/2015-CX.
5. Consideration of documents to establish delivery on F.O.R. basis.

Analysis:
1. The appellants, engaged in steel forgings manufacturing, availed cenvat credit on inputs, capital goods, and input services, including outward transportation services. A Show Cause Notice alleged inadmissible credit on outward transportation services, leading to a demand for recovery, interest, and penalty.
2. After adjudication, the original authority disallowed the credit, confirmed the demand, and imposed a penalty, which was upheld by the Commissioner (Appeals), prompting the appeal.
3. The appellant's counsel argued that availing transportation services for finished products' delivery on F.O.R. basis entitles credit, citing various court and tribunal decisions. Reference was made to Board Circular No.999/6/2015-CX, clarifying eligibility for credit if goods' ownership remains with the assessee until delivery at the buyer's premises.
4. The respondent reiterated the findings of the impugned order, opposing the appellant's contentions.
5. Upon hearing both sides, the Tribunal acknowledged the settled issue of credit admissibility on outward transportation services when delivered on F.O.R. basis. Considering the cited decisions and the Board Circular, the Tribunal deemed it necessary to remand the matter to the adjudicating authority for reconsideration of the documents establishing F.O.R. delivery, allowing the appeal by way of remand.