2019 (11) TMI 1122 - AT - Central Excise

CENVAT Credit - input services - GTA Services - the service used for removal of goods wherein the sale is on FOR basis - HELD THAT - The fact is no under dispute and all the documents related to the said fact has been submitted before the original authority which has been taken into consideration - As per the facts, the sale is on FOR basis, freight was borne by the appellant for clearance of the goods and the same is included in the assessable value on which excise duty is discharged. Under the same set of facts this Tribunal in the case of Ultratech Cement vs CCE Kutch 2019 (2) TMI 1487 - CESTAT AHMEDABAD after considering the Hon ble Supreme Court judgment in the case of Ultratech Cement 2018 (7) TMI 1574 - SC ORDER allowed the credit. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Entitlement for Cenvat credit in respect of GTA service used for removal of goods where the sale is on FOR basis.

Detailed Analysis:

1. Submission by Appellant:
The Appellant argued that since the sale is on FOR basis and the freight is included in the assessable value on which excise duty is discharged, they are entitled to Cenvat credit on GTA service. They relied on various judgments supporting their claim.

2. Submission by Respondent:
The Respondent reiterated the findings of the impugned order and cited judgments in support of their stance against granting Cenvat credit on GTA service.

3. Tribunal's Analysis:
After hearing both sides and examining the records, the Tribunal found that the sale was indeed on FOR basis, with the freight borne by the Appellant. Referring to a specific judgment, the Tribunal highlighted that until the goods are handed over to the buyer, the cost is borne by the seller, making the freight paid on outward transportation eligible as an "Input Service."

4. Legal Principles Applied:
The Tribunal referred to the Sale of Goods Act and previous judgments to determine the point of sale and ownership transfer in the context of FOR destination sales. It emphasized that the ownership of goods remains with the seller until delivery to the buyer's premises, justifying the eligibility for Cenvat credit on outward GTA.

5. Benefit of Circulars:
The Tribunal acknowledged the Appellant's compliance with relevant circulars during the material period and ruled that the benefit of such circulars should be available to them. It also dismissed any limitation claims due to the historical litigation surrounding the issue of Cenvat credit on outward GTA.

6. Final Decision:
Based on the facts and legal precedents, the Tribunal set aside the impugned orders and allowed the appeals, aligning with the principles established in previous judgments with similar facts. The judgment emphasized the importance of ownership transfer and the place of sale in determining the eligibility for Cenvat credit on GTA service used for goods removal on FOR basis.