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2018 (5) TMI 1454 - AT - Central ExciseCENVAT credit - input services - outward transportation during the period April, 2011 to March, 2016 - Board vide Circular No. 97/8/2007-ST dated 23.8.2007 - Held that - during the relevant period, there was a clarification of Board vide Circular No. 97/8/2007-ST dated 23.8.2007, according to which the credit on outward transportation was allowed, subject to conditions imposed - As per the facts of the present case, the sale is undisputedly on FOR basis as transportation charges is included in the assessable value of the goods, which is seen from the purchase order. Since it is on FOR basis the risk upto the place of removal was borne by the purchaser. Therefore, looking all the three criteria required by Board, the place of removal is at buyer s place. Therefore, in terms of the circular, appellant was very much entitled for the CENVAT Credit. Penalty u/s 11AC - Held that - since appellant did not have any mala fide intention, penalty imposed under Section 11AC is also not sustainable. There is no dispute raised either by the assessee or by the Revenue. Therefore, once the assessment attained finality, no benefit can be taken from the final assessed position of the final product for the purpose of adjustment of separate credit taken on outward transportation. Appeal allowed in part.
Issues involved:
Whether the appellant is entitled to CENVAT Credit for outward transportation during April 2011 to March 2016. Analysis: The appellant argued that as per the Supreme Court judgment in Ultratech Cement Ltd, the demand for CENVAT Credit reversal on outward transportation is not sustainable. They relied on Board Circular No. 97/8/2007-ST and claimed entitlement to the credit based on the interpretation of the Circular. The appellant contended that they acted in good faith based on the Circular and that the extended period for demand is time-barred due to the prevailing Circular during the relevant period. The Revenue argued that the extended period for demand is valid as the appellant did not disclose the wrongful availing of credit for outward transportation, which was detected by Audit. They contended that the Circular was not correctly interpreted, and the demand is not time-barred due to the amendment in the definition of input service from 1.4.2008. The Tribunal noted that the Circular allowed credit on outward transportation if certain criteria were met, including the risk of loss or damage being borne by the seller until delivery at the buyer's place. The Tribunal found that the appellant fulfilled the criteria as the sale was on FOR basis, and the risk was on the buyer. Despite the Supreme Court judgment in Ultratech Cement Ltd, the Tribunal held that the appellant acted in good faith based on the Circular and was entitled to the credit during the relevant period. Therefore, the demand for the extended period was set aside, while the demand for the normal period was upheld. Regarding the penalty under Section 11AC, the Tribunal ruled that since the appellant had no mala fide intention, the penalty was not sustainable and was set aside for the entire period. The Tribunal disagreed with the appellant's argument of adjusting the CENVAT Credit based on the final assessed position of the final product, as the assessment had attained finality with no disputes. Therefore, no benefit could be derived from the final assessed position for the adjustment of separate credit on outward transportation. In conclusion, the Tribunal partially allowed the appeal, modifying the impugned orders accordingly.
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