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2022 (4) TMI 514 - AT - Central ExciseCENVAT Credit - input services - outward GTA - sale is on FOR basis - freight is integral part of the value of the goods on which excise duty was charged - Board Circular dated 08.06.2018 - HELD THAT - The fact is not under dispute that the sale is on FOR basis and the freight is integral part of the price of the goods on which the excise duty was discharged. In this fact the appellant is entitled for cenvat credit as held by this Tribunal in the case of M/S SANGHI INDUSTRIES LTD. VERSUS C.C.E. KUTCH (GANDHIDHAM) 2019 (2) TMI 1488 - CESTAT AHMEDABAD and M/S ULTRATECH CEMENT LTD. VERSUS C.C.E. KUTCH (GANDHIDHAM) 2019 (2) TMI 1487 - CESTAT AHMEDABAD , where it was held that as the ownership of the goods remained with the Appellants till the goods reached to the customer s doorstep and the freight charges as well as damage (insurance) to the goods till destination were borne by the Appellant, they are eligible for the credit of service tax paid by them on outward freight. Thus, it is concluded that in case of FOR sale, the cenvat credit on outward transportation is admissible. Therefore, as per the facts of the present case, the sale being FOR sale and freight is inclusive in the price of the goods and the same was not charged separately to the customers, the cenvat credit in respect of outward transportation is admissible - appeal allowed - decided in favor of appellant.
Issues: Entitlement to cenvat credit for outward GTA
The judgment by the Appellate Tribunal CESTAT Ahmedabad dealt with the issue of whether the appellant is entitled to cenvat credit in respect of outward GTA. The appellant argued that since the sale was on FOR basis and the freight was an integral part of the value of the goods on which excise duty was charged, the credit should be admissible. The appellant relied on various judgments and a Board Circular to support their claim. On the other hand, the Revenue, represented by the Authorized Representative, reiterated the findings of the Impugned order and cited specific judgments to support their position. The Tribunal carefully considered the submissions from both sides and examined the records. It was noted that the sale was indeed on FOR basis, and the freight was an integral part of the price of the goods on which excise duty was discharged. This fact was evident from both the Order in Original and the Order in Appeal. The Tribunal referenced specific paragraphs from these orders to highlight that the sale being on FOR basis and the freight being integral to the price of the goods were not under dispute. In light of previous Tribunal decisions and the Board Circular issued after a Supreme Court judgment, the Tribunal concluded that in the case of FOR sale, cenvat credit on outward transportation is admissible. The Tribunal specifically mentioned the cases of Sanghi Industries Ltd. and Ultratech Cement Limited, where similar conclusions were reached and upheld by the Gujarat High Court. The Tribunal also addressed the reliance placed on a Supreme Court judgment in the case of Ultratech, stating that it had already been considered in previous cases. Ultimately, based on the facts of the present case where the sale was on FOR basis, the freight was inclusive in the price of the goods, and not charged separately to customers, the Tribunal held that the cenvat credit for outward transportation was admissible. Consequently, the impugned order was set aside, and the appeal was allowed.
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