2024 (9) TMI 109 - AT - Central Excise

CENVAT Credit - outward transportation in respect of sale of goods - sale of goods is on FOR basis - inclusion of transportation charges in the assessable value of excisable goods on which excise duty was discharged - HELD THAT - The lower authorities have confirmed the demand only on the basis of Kolkata High Court judgment in the case of COMMISSIONER OF CENTRAL EXCISE VERSUS M/S. VESUVIOUS INDIA LTD. 2013 (12) TMI 1025 - CALCUTTA HIGH COURT . It was also observed by the Learned Commissioner adjudication that the judgment in the case of Commissioner of Central Excise in COMMISSIONER OF C. EX. CUSTOMS VERSUS PARTH POLY WOOVEN PVT. LTD. 2011 (4) TMI 975 - GUJARAT HIGH COURT is not relevant to the present case. However much water has flown on this issue as subsequent to the decision referred by the learned Commissioner the Hon ble Supreme Court in the case of M/s. Ultratech Cement Ltd. 2018 (2) TMI 117 - SUPREME COURT has decided the issue against the assessee, however on the basis of said judgment, the board has issued a circular wherein certain parameter was fixed to allow the cenvat credit in respect of outward transportation. Thereafter, this Tribunal in case of M/S ULTRATECH CEMENT LTD. VERSUS C.C.E. KUTCH (GANDHIDHAM) 2019 (2) TMI 1487 - CESTAT AHMEDABAD and M/S SANGHI INDUSTRIES LTD. VERSUS C.C.E. KUTCH (GANDHIDHAM) 2019 (2) TMI 1488 - CESTAT AHMEDABAD held that where the freight is included in the assessable value, on which excise duty was discharged, fright was born by the supplier of the goods, the Cenvat credit on such output transportation is admissible. The entire matter needs to be re-considered in the light of the fact of the present case and on the basis of various judgments delivered by the different forum subsequent to passing of the impugned orders - the appeals are allowed by way of remand to the adjudicating authority.

Summary

Issues:
Whether the appellant is eligible for Cenvat Credit on outward transportation in different categories.

Analysis:
The case involved the eligibility of the appellant for Cenvat Credit on outward transportation in various categories. The appellant's counsel argued that transportation charges were included in the assessable value of goods, and the freight was borne by the appellant without being separately recovered from the customer. The counsel relied on various judgments to support the appellant's claim, emphasizing that similar issues had been decided in the appellant's favor previously. The revenue, represented by the Superintendent, reiterated the findings of the impugned order.

Upon careful consideration, the Tribunal noted that the lower authorities had based their decision on a Kolkata High Court judgment, which was subsequently challenged by the Hon'ble Supreme Court in the case of M/s. Ultratech Cement Ltd. The Supreme Court's decision led to the issuance of a circular by the board, setting parameters for allowing Cenvat credit on outward transportation. Subsequent judgments by the Tribunal and the Gujarat High Court upheld the admissibility of Cenvat credit where freight was included in the assessable value and borne by the supplier of goods.

In light of the evolving legal landscape and the precedents set by various judgments, the Tribunal concluded that the matter required re-consideration. Therefore, the impugned orders were set aside, and the appeals were allowed by way of remand to the adjudicating authority for further review and decision.

The judgment, delivered by the Appellate Tribunal CESTAT AHMEDABAD, highlighted the importance of considering evolving legal interpretations and precedents in determining the eligibility of Cenvat Credit on outward transportation. The decision underscored the need for a thorough re-examination of the case in light of subsequent judgments and legal developments to ensure a fair and just resolution.