Ambuja Cements Limited Vs Commissioner (Appeals), Central Goods & Service Tax, Central Excise (CESTAT Delhi)
CESTAT Delhi overturned a decision by the Commissioner (Appeals), granting Ambuja Cements Limited the right to claim CENVAT credit for service tax paid on Goods Transport Agency (GTA) services used to deliver cement to buyers’ premises under FOR (Free on Road) terms. The earlier orders had denied the credit, arguing that the “place of removal” remained the factory, making transportation costs ineligible for credit.
The CESTAT relied on the Larger Bench decision in Ramco Cement vs. CCE, which clarified that for sales on FOR destination basis, the place of removal shifts to the buyer’s premises. Since ownership transfers at the buyer’s location in such cases, the transportation services qualify as “input services” under Rule 2(l) of the CENVAT Credit Rules, 2004. Consequently, the court ruled in favor of Ambuja Cements, allowing the CENVAT credit and setting aside the penalties and interest imposed in the earlier orders.
FULL TEXT OF THE CESTAT DELHI ORDER
The Order in Appeal dated 14.9.20211 passed by the Commissioner (Appeals), Central Excise and CGST is assailed by M/s. Ambuja Cement Ltd.2 in this appeal. By the impugned order, the Commissioner (Appeals) dismissed the appellant’s appeal and upheld the Order in Original dated 29.1.2021 passed by the Additional Commissioner disallowing the CENVAT credit of the service tax paid on the goods transport agency (GTA) services received by the appellant to transport the cement from its factory to the buyer’s premises sold on FOR (free on road) destination basis and ordered its recovery along with interest and imposed penalties.
