2020 (4) TMI 198 - AT - Central Excise

CENVAT Credit - input services - outward transportation of finished goods from the factory to their buyer s premises - April 2011 to June 2017 - HELD THAT - Appellant has produced sample invoice / purchase orders to contend that they have paid Central Excise duty after including freight charges; that it is also argued by her that since the goods have been delivered at the buyer s premises without collecting freight charges from the customer and the same is borne by the appellant, they are eligible for credit of service tax paid on the freight charges upto the buyer s premises - To peruse the documents relating to the issue under consideration it is best to remit the case back to the adjudicating authority who shall look into the documents furnished by the appellant to determine the place of removal. If the appellant has included the freight charges in the transaction value while discharging the excise duty, they would be eligible for the credit of service tax paid on freight charges incurred by them upto the buyer s premises. Appeal allowed by way of remand.

Summary

Issues:
1. Eligibility of cenvat credit on service tax paid for Goods Transport Agency Services.
2. Determination of the place of removal for excise duty purposes.
3. Applicability of legal precedents in deciding the case.

Analysis:
1. The case involved the eligibility of cenvat credit on service tax paid for Goods Transport Agency Services used for outward transportation of finished goods. The Department contended that the credit was not eligible, leading to show cause notices and subsequent confirmation of demand, interest, and penalty by the original authority. The Commissioner (Appeals) upheld the demand and interest but set aside the penalties. The appellants appealed to the Tribunal against the confirmation of demand and interest.

2. The appellant argued that the finished products, being customer-specific and sensitive, were delivered to the buyer's premises without collecting separate freight charges, which were included in the product price. They claimed that the buyer's premises should be considered the place of removal based on the decision in the case of Roofit Industries Ltd. The appellant distinguished the case of Ultratech Cements Ltd., stating that the factory gate was not the place of removal. The department, however, argued that the factory gate was the place of removal, justifying the disallowance of the credit.

3. After hearing both sides, the Tribunal examined sample invoices and purchase orders provided by the appellant. It was decided that the case should be remanded back to the adjudicating authority to determine the place of removal based on the documents furnished by the appellant. If it is found that the freight charges were included in the transaction value while discharging excise duty, the appellant would be eligible for the credit of service tax paid on freight charges up to the buyer's premises, applying the decision in the Roofit Industries Ltd. case. Therefore, the impugned order was set aside, and the appeals were remanded for fresh consideration after allowing the appellant to submit relevant documents.

This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, legal precedents cited, and the Tribunal's decision to remand the case for further consideration based on the documents provided by the appellant.