Case Law Details
Kirloskar Oil Engines Ltd Vs C.C.E. & S.T. (CESTAT Ahmedabad)
There is no dispute in the fact that the sale of goods is on FOR basis, freight and transit insurance is included in the price of the goods and the same was not collected from the buyer of the goods. In this background, the place of removal shifts from factory to the buyer’s place. When this be so as per the definition of input service in terms of Rule 2(l) of Cenvat Credit Rules, 2004, the appellant is entitled for cenvat credit. This issue has been considered in the case of Ultratech Cement Ltd. And Sanghi Industries (supra) and on the identical fact, this Tribunal has taken a view that when the sale is on FOR basis, the place of removal will be the buyer’s place and accordingly, the assessee is entitled for cenvat credit. This decision of the Tribunal has been upheld by the Hon’ble Gujarat High Court reported at 2020-TIOL-1638-HC-AHM-CX., accordingly, the issue is settled in favour of the assessee.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The issue involved is that whether the appellant is entitled for cenvat credit in respect of outward GTA service when the sale of goods admittedly on FOR basis.
2. Shri Shailesh P. Sheth, Learned Counsel appearing on behalf of the appellant submits that the issue is no longer res-integra as in identical facts, this Tribunal in the case of Ultratech Cement and Sanghi Industries Ltd. 2019 (369) ELT 1424 (Ahd) held that when the sale is on FOR basis, freight is included in the assessable value and the same was borne by the supplier of goods, the place of removal will be the destination of the buyer’s place accordingly, in terms of Rule 2(l) appellant shall be entitled for the cenvat credit. He also referred to an order of Commissioner (Appeals) in their own case wherein after considering the Tribunal judgement in the case of Ultratech Cement and Sanghi Industries Ltd., Commissioner (Appeals) has allowed the cenvat credit. He placed reliance on the following judgements:
- Sanghi Industries Ltd. 2019 (369) ELT 1424 (Tri Ahmd)
- CCE Mumbai vs Emco Ltd. 2015 (322) ELT 394 (SC)
- CCE vs Roofit Industries 2015 (319) ELT 221 (SC)
- Ultratech Cement Ltd. 2019-TIOL-1420-CESTAT-AHM
- Rane Brake India Ltd. 2019-TIOL-3696-CESTAT-MAD
3. Shri J.A. Patel, Learned Superintendent (Authorized Representative) appearing on behalf of the Revenue reiterates the findings of the impugned order. He placed reliance on theHon’ble Supreme Court judgement in the case of Ultratech Cement Ltd. 2018 (9) GSTL 337 (SC).
4. I have carefully considered the submissions made by both the sides and perused the records. There is no dispute in the fact that the sale of goods is on FOR basis, freight and transit insurance is included in the price of the goods and the same was not collected from the buyer of the goods. In this background, the place of removal shifts from factory to the buyer’s place. When this be so as per the definition of input service in terms of Rule 2(l) of Cenvat Credit Rules, 2004, the appellant is entitled for cenvat credit. This issue has been considered in the case of Ultratech Cement Ltd. And Sanghi Industries (supra) and on the identical fact, this Tribunal has taken a view that when the sale is on FOR basis, the place of removal will be the buyer’s place and accordingly, the assessee is entitled for cenvat credit. This decision of the Tribunal has been upheld by the Hon’ble Gujarat High Court reported at 2020-TIOL-1638-HC-AHM-CX., accordingly, the issue is settled in favour of the assessee.
5. As regard, the reliance placed by the learned Authorized Representative, on the Hon’ble Supreme Court judgement in the case of Ultratech Cement Ltd. 2018 (9) GSTL 337 (SC), I find that this judgement has been considered by this Tribunal in the case of Sanghi Industries and Ultratech Cement Ltd. (Supra) and taking reference from the Board Circular, which was issued in pursuant to the Ultratech cement judgment, the same was distinguished, therefore, in the facts of the present case, the judgement of Hon’ble Supreme Court in the case of Ultratech Cement (supra) which was relied upon by Learned Authorized Representative is not applicable.
6. As per my above discussion and findings, the appellant is entitled for cenvat credit on outward GTA. Accordingly, the impugned order is set aside. Appeal is allowed.
(Dictated & Pronounced in the open court)
