Shree Rajasthan Syntex Ltd. Vs Commissioner, Central Goods and Service Tax (CESTAT Delhi)
The appellant have admittedly made sales on FoR destination basis. Further, it is the appellant who have borne the incidence of freight and has paid the service tax on the same. I further hold that the place of removal is the premises of the buyer, and accordingly in terms of the amended provision in Rule 2(l), the appellant is entitled to cenvat credit on outward transport under dispute, the same has been incurred upto the place of removal.
FULL TEXT OF THE CESTAT DELHI ORDER
The issue in this appeal is whether the appellant have rightly taken cenvat credit of service tax Rs.1,60,152/- on outward freight during the period 01.04.2008 to March, 2009.
2. The demand as per the show cause notice also comprised an amount of Rs. 2,46,425/- relating to the period January, 2007 to 31.03.2008. The ld. Commissioner (Appeals) held that service tax paid on transportation of finished goods from the factory to the premises of the customer could be taken as cenvat credit and accordingly allowed this amount.
3. So far the period from 01.04.2008 to 31.03.2009 is concerned, in view of the amendment in the definition of input service w.e.f. 01.04.2008, the learned Commissioner (Appeals) refers to the ruling of the Hon’ble Supreme Court in the case of CST vs. Ultratech Cement Ltd. in Civil Appeal No. 11261 of 2016, and accordingly it was held that the appellant is not entitled to cenvat credit for the period April, 2008 to March, 2009.
4. Being aggrieved, the appellant is before this Tribunal.
5. Learned Counsel for the appellant inter alia urges by referring to the purchase order received from Shree M. R. Sales wherein the rate of different grade of finished product is mentioned. Further from the copy of invoice cum challan, it is pointed out that from the sale price after deducting cash discount, excise duty has been added. No amount has been claimed for freight. Thus, the sales are made on FoR destination basis. This fact is also certified by the Chartered Accountant stating that the appellant have sold their goods on FoR destination basis, i.e. freight was paid by the appellant to the transporter till the place of delivery of goods, and property in goods was transferred to the buyer at the destination. Thus, the place of removal is the ‘premises of the buyer’ and not the factory gate. It is further urged that under the facts and circumstances the place of removal is premises of the buyer. Accordingly, the appellant is entitled to cenvat credit on the outward transportation.
5.1 Learned Counsel also relies on the Board Circular No.1065/4/2018-CX of 2018, wherein referring to the four judgements of the Hon’ble Supreme Court, the Board has given instructions to the field formation to decide the issue of outward transportation on case to case basis, taking into consideration the ‘place of removal’.
6. Learned Authorised Representative appearing for the Revenue relies on the impugned order.
7. Having considered the rival contentions, I find that in the facts and circumstances, the appellant have admittedly made sales on FoR destination basis. Further, it is the appellant who have borne the incidence of freight and has paid the service tax on the same. I further hold that the place of removal is the premises of the buyer, and accordingly in terms of the amended provision in Rule 2(l), the appellant is entitled to cenvat credit on outward transport under dispute, the same has been incurred upto the place of removal.
8. In view of my findings as above, I allow this appeal and set aside the impugned order.
(Pronounced on 06.04.2022).
