Case Law Details
M/s Poddar Pigments Ltd. Vs CCE, Jaipur (CESTAT Delhi)
Courier services stand utilised by the appellant for sending the samples to their prospective buyers and for procuring orders from them. Ld. Advocate also explains that they are not charging their buyers for the said samples, though duty is being paid by them on the deemed assessable value. In such a scenario, I agree with the ld. Advocate that sending of samples to their buyers is a promotional activity relatable to the sale of their final product and to increase their business. The same cannot be considered to be outward transportation of their final excisable product. As such, to deny the credit on the said ground is not justifiable.
FULL TEXT OF THE CESTAT JUDGMENT
The dispute in the present appeal relates to availment of Cenvat credit of service tax paid on courier services, which stand utilised by the appellant for despatch of samples of their final product to their prospective customers. The original adjudicating authority allowed such credit but on appeal by the Revenue, Commissioner (Appeals) reversed the order by observing that such courier services is nothing but outward transportation of the goods and since factory gate is the starting point of such outward transportation, the credit could not be available to the assessee.
2. On the other hand, the contention of the ld. Advocate is that the definition of input service itself includes the services relating to sales promotion. Sending of samples by courier to procure orders from their prospective buyers is not outward transportation of their final product but is an activity relatable to sales promotion. Such sales promotion being specifically included in the definition of input service, the same would be Cenvatable. He also placed reliance on various precedent decisions of the Tribunal.
3. Ld. AR appearing for the Revenue submits that whatever may be the mode, but the fact remains that it is transportation activity. As such, in the absence of any proof that such transportation was on FOR destination basis, the credit would not be available.
4. After carefully considering the submissions, I note that the courier services stand utilised by the appellant for sending the samples to their prospective buyers and for procuring orders from them. Ld. Advocate also explains that they are not charging their buyers for the said samples, though duty is being paid by them on the deemed assessable value. In such a scenario, I agree with the ld. Advocate that sending of samples to their buyers is a promotional activity relatable to the sale of their final product and to increase their business. The same cannot be considered to be outward transportation of their final excisable product. As such, to deny the credit on the said ground is not justifiable.
5. Otherwise also, I find that the Tribunal in the cases of Piramal Glass Ltd. Vs. CCE, Surat – 2017 (49) STR 167 (Tri.-Ahmd.), Parle International Vs. CCE, Vapi – 2014 (33) STR 477 (Tri.-Ahmd.), CCE Vapi Vs. Parle International Pvt. Ltd. – 2012 (28) STR 111 (Tri.-Ahmd.), Sunbeam Generators Pvt. Ltd. Vs. CCE & ST Pondicherry – 2016 (45) STR 424 (Tri.-Chennai) and Perfetti Van Meele India Ltd. Vs. CCE, Delhi-IV – 2016 (44) STR 624 (Tri.-Chan.) has held that such services to be Cenvatable. Accordingly, by following the same, I set aside the impugned order and allow the appeal with consequential relief.
(Dictated & pronounced in open Court)
