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2022 (6) TMI 703 - AT - Central ExciseCENVAT Credit - input services - GTA services availed in respect of goods supplied by them from their premises to the buyers premises - goods sold on FOR basis - Circular No. 988/12/2014-CX dated 20th October, 2014 - HELD THAT - The issue regarding the sale being FOR basis has been raised for the first time in Tribunal. In terms of the aforesaid Circular, the matter needs to be re-examined by the lower authorities and if the sales are on FOR basis, the benefit of Circular needs to be granted to the appellant by allowing the credit. The matter is remanded to the original authority to examine if the goods have been supplied on FOR basis. If it is found that the goods have been supplied on FOR basis, the credit has to be allowed to appellant - Appeal allowed by way of remand.
Issues:
1. Entitlement to cenvat credit of GTA services for goods supplied from appellant's premises to buyers' premises. 2. Ascertainment of the place of removal based on circulars and legal principles. Analysis: 1. The appeal before the Appellate Tribunal CESTAT Ahmedabad involved the issue of whether the appellants are entitled to cenvat credit of GTA services for goods supplied from their premises to buyers' premises. The appellants claimed entitlement based on Circular No. 988/12/2014-CX dated 20th October, 2014, which directs that credit of input services is available up to the place of removal, as defined in the CENVAT Credit Rules, 2004. The key contention was whether the goods were sold on FOR basis, entitling them to the benefit of the circular. 2. The second issue revolved around the ascertainment of the place of removal, as per circulars issued by the Board. Circulars dated 3-3-2003 and 23-8-2007 emphasized determining the point of sale to establish the place of removal. The circulars highlighted that the place of sale is where the transfer of property in goods occurs from the seller to the buyer, as per the Sale of Goods Act, 1930. The Tribunal and the Supreme Court had previously upheld this principle in relevant cases. 3. The circulars underscored that determining the place of removal should focus on the transfer of property in goods from the seller to the buyer, as per the Sale of Goods Act, 1930. Deviating from this principle by considering factors like freight charges or insurance ownership was contrary to the legal position. The Sale of Goods Act provisions were referenced to ascertain the transfer of possession and property in goods, emphasizing the importance of contractual terms, parties' intentions, and unconditional appropriation. 4. The Tribunal emphasized that the place of removal must be determined in line with the Central Excise Act, 1944, and the Sale of Goods Act, 1930. Factors such as transport payment, inclusion of transport charges in value, or insurance ownership were deemed irrelevant in ascertaining the place of removal. The focus remained on where the sale occurred and when the property in goods passed from the seller to the buyer. 5. Ultimately, the Tribunal set aside the impugned order and remanded the matter to the original authority for re-examination. If it was established that the goods were supplied on a FOR basis, the appellant was to be granted the benefit of the circular by allowing the credit. The appeal was allowed for further examination by the original adjudicating authority to determine the applicability of the circular in granting cenvat credit for GTA services based on the FOR basis of goods supply.
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