Transformers And Electricals Kerala Ltd Vs Commissioner of Central Tax And Central Excise Central Revenue Building (Kerala High Court)
Kerala High Court held that as transportation costs from place of removal to buyer’s premises not included in the assessable value of goods for purpose of payment of Central Excise duty hence service tax levied on such transportation cost not available as CENVAT Credit.
Facts- The appellant is engaged in the manufacture and sale of electrical transformers and allied products falling under Chapter 85 of the Central Excise Tariff Act, 1985. During the period between 01.04.2012 and 28.02.2015, it had entered into contracts with various customers for the supply, installation at site and commissioning of transformers manufactured by it. The terms and conditions of the contracts entered into with the customers clearly indicated that the contracts were to be on FOR basis whereby the obligation to transport the goods from the place of manufacture to the buyer’s premises was on the appellant.
The appellant’s case before the authorities below had been that inasmuch as the sale was concluded only at the buyer’s premises, it was entitled to treat the services availed from the goods transport agencies as an input service in connection with the manufacture and supply of goods to the buyer concerned, and claim input tax credit under the CENVAT Credit Rules.
