Case Law Details

Case Name : Commissioner of Central Excise, Dehradun Vs M/s. Hindustan Zinc Ltd. (CESTAT Delhi)
Appeal Number : Excise Appeal No. 54516 of 2015- Ex(SM)
Date of Judgement/Order : 01/03/2016
Related Assessment Year :
Courts : All CESTAT (775) CESTAT Delhi (273)



The Department filed an appeal against the order of the Commissioner (Appeals) and raised the legal issue by submitting that the place of removal is the factory gate and the transportation of the final product manufactured by the assessee beyond the factory gate will not get covered by the definition of ‘input service’ so provided under the CENVAT Credit Rules, 2004.

For the convenience, it is stated that the short issue involved in the appeal which was pending before the Hon’ble Tribunal was as to whether M/s Hindustan Zinc Limited was entitled to avail the CENVAT Credit of Service Tax paid on the outward transportation of their product up to the customer’s premises.


The Hon’ble Tribunal after going through the order-in-appeal passed by the Commissioner (Appeals) observed that the said detailed order was passed taking note of the Larger Bench decision [2009 (15) STR   23 (LB)] of the Tribunal in the case of ABB Ltd. as upheld by the Hon’ble Karnataka High Court [2011 (23) STR 97(Kar)] read with the Board’s Circular 97/8/07 dated 23.08.2007. Therefore, the Commissioner (Appeals) extended the benefit to M/s Hindustan Zinc by holding that inasmuch as the sales are on FOR basis, the place of removal get extended upto the consignee doorstep.

The Hon’ble Tribunal further observed that the Commissioner (Appeals) has also referred to the earlier order of the Tribunal in the assessee’s own case holding that they would be entitled to avail the CENVAT Credit of Service Tax paid on the outward transportation of their final product.

It was further noted that the Department in their memo of appeal has nowhere referred to the Tribunal’s earlier decision. Therefore, it was not their case that the said decision of the Tribunal stand either not accepted by them or stand reversed by any higher Appellate Forum.

The Hon’ble Tribunal also pointed out that the assessee’s sale was on FOR basis and this fact not disputed in the Show Cause Notice issued to them. In view of the facts and circumstances discussed above, the Hon’ble Tribunal rejected the appeal of the Department.


Author’s view

In case of FOR delivery, the assessee should charge duty of excise on the value inclusive of freight. If assessee is not doing or not paying duty of excise on gross value including outward transportation freight, the same will be contradicting the assessee’s own facts and arguments that goods are sold on FOR basis.

Sumit WadhwaAbout Author: Sumit Wadhwa has a Bachelor’s degree in Commerce from the University of Delhi and holds Professional Affiliation to the Bar Council of Delhi. He is also a company secretary from the Institute of Company Secretaries of India and can be reached at Mob: +91- 97187 04960 / Email:

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