Case Law Details
Sanghi Industries Ltd. Vs CCE (CESTAT Ahmedabad)
CESTAT Ahmedabad allows CENVAT credit on GTA services for doorstep delivery, distinguishing from Ultratech judgment. Relying on Circulars, benefit extended during the relevant period.
CESTAT Ahmedabad has held that Cenvat credit was available on GTA services for delivering goods to buyer’s doorstep, in a case involving both MRP and non-MRP sales. Period involved was after 1-4-2008. The Tribunal observed that goods were cleared on FOR basis and freight/damages in transit was responsibility of assessee. Supreme Court judgement in Ultratech was distinguished noting that it did not consider Point of Sale or FOR price issue. CBIC Circulars dated 22-12-2014 and 23- 8-2007, as in force during relevant time, were relied upon.
Till the goods are handed over to the buyer, the cost is borne by the assessee or in other words where the goods are cleared on FOR basis the freight paid on outward transportation would qualify as “Input Service”
As regard the issue raised by the appellant that the excise duty paid on the element of freight being more than the element of cenvat credit on the outward GTA, therefore, there should not be any demand. We find force in the argument of the appellant however, since we are deciding the issue on merit, the admissibility of the Cenvat Credit on outward GTA on the basis of provision under Cenvat Credit Rules itself, we need not to deal this aspect hence, the issue related to this fact left open. As regard the submission made by Ld. Counsel that they have been operating as per the guideline given in the Circular dated 22.12.2014 and 23.08.2007 which was operative at the relevant time, therefore, even though the same were withdrawn w.e.f. 08.06.2018, but at the relevant time the benefit of said Circular shall be available. We find force in the argument of the Ld. Counsel as the law on this issue has been settled time and again by the Hon’ble Supreme Court as per the judgment cited by the Ld. Counsel and on various other judgments that beneficial Circular cannot be withdrawn retrospectively. Consequently, the benefit of the said Circulars shall be available to the appellant during the material period of this case.
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