2018 (2) TMI 898 - AT - Central Excise

CENVAT credit - Goods Transportation Service - CBEC Circular No.988/12/2014-CX dated 20.10.2014 - Held that - transportation services for transporting their final product from their factory to their buyers place and transport charge has been included in the assessable value. In such a case, the service tax paid on such outward transportation charges shall be admissible as CENVAT Credit to the appellant - credit allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
- Appeal against allowing CENVAT credit on "Goods Transportation Service" based on CBEC Circular
- Interpretation of place of removal for availing CENVAT credit on outward transportation charges

Analysis:
The appeal revolves around the decision of allowing CENVAT credit on "Goods Transportation Service" by the learned Commissioner (Appeals) based on a CBEC Circular. The Revenue challenges this decision, citing a Kolkata High Court case to argue that transportation should be from one place of removal to another as per Cenvat Credit Rules, 2004. On the contrary, the respondent argues that the CBEC Circular clarifies the place of removal as the place where the sale of goods occurs, enabling them to avail outward transportation service charges.

The Tribunal considered the submissions and highlighted the CBEC Circular issued after the Kolkata High Court case, emphasizing that the place of removal is determined by the Sale of Goods Act, not by factors like transport payment or insurance. The Circular clarifies that the relevant consideration is where the property in goods passes from the seller to the buyer. Therefore, if transport charges are included in the assessable value and the sale occurs at the buyer's place, the service tax on outward transportation charges is eligible for CENVAT Credit.

Ultimately, the Tribunal upheld the respondent's right to avail CENVAT credit on outward transportation charges, concluding that there was no flaw in the impugned order. The appeal by Revenue was dismissed, affirming the correctness of the respondent's actions in claiming the credit.