2022 (2) TMI 358 - AT - Central Excise

CENVAT Credit - input services - Goods Transport Agency Service, for despatching their finished goods (outward transportation) on FOR destination basis to their buyers - place of removal - HELD THAT - In the facts and circumstances of this case, the place of removal is the premises of the buyer, not the factory gate of the sellor/appellant, as the finished goods are cleared by the appellant on FOR destination basis . Accordingly, the appellant is entitled to cenvat credit on the GTA service for outward transportation of the goods on FOR destination basis. Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
- Entitlement to cenvat credit of service tax paid for Goods Transport Agency Service for outward transportation on FOR destination basis.

Analysis:
The main issue in this case was whether the appellant, M/s. Hindustan Zinc Ltd., was entitled to cenvat credit of service tax paid for availing the Goods Transport Agency Service for despatching their finished goods on FOR destination basis to their buyers. The appellant had paid the GTA charges for the services and taken cenvat credit of the tax amount charged in the invoice for transportation on a reverse charge basis. The Revenue argued that the 'place of removal' was the factory gate and not the premises of the buyer. However, the appellant contended that as they had paid excise duty on the basic sale price, which included the transportation element up to the buyer's premises, they were entitled to the cenvat credit. The appellant also relied on a precedent decision of the Tribunal in their own case where a similar issue was decided in their favor.

The Authorized Representative for Revenue referred to the impugned order and highlighted the definition of 'place of removal' under Section 4(3)(c) and 4(3)(cc), along with Circular No.1065/4/2018-CX. The Circular emphasized that cenvat credit is allowable with respect to the 'place of removal' on outward transportation, and past cases should be decided accordingly. After considering the arguments, the Tribunal held that in the present case, the 'place of removal' was the premises of the buyer, not the factory gate of the seller/appellant, as the goods were cleared on FOR destination basis. Therefore, the appellant was entitled to cenvat credit on the GTA service for outward transportation of goods on FOR destination basis. The appeals were allowed, the impugned order was set aside, and the appellant was granted consequential benefits in accordance with the law.