Custom, Excise & Service Tax Tribunal
Rane Brake Lining Limited vs Commissioner Of Gst&Amp;Cce(Trichy) on 10 July, 2019
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CUSTOMS, EXCISE AND SERVICE TAXAPPELLATE TRIBUNAL
CHENNAI
Regional Bench - Court No. III
Excise Appeal No.40766 of 2019
(Arising out of Order-in-Appeal No.35 to 41/2019 (TRY) dt. 05.02.2019 passed by
the Commissioner of GST & Central Excise (Coimbatore), Circuit Office @
Tiruchirappalli)
M/s. Rane Brake Lining Ltd. : Appellant
Sethurapatti Village
Fathima Nagar Post,
Srirangam Taluk
Trichy 620 012.
VERSUS
The Commissioner of GST & CE : Respondent
No.1, Williams Road, Cantonment, Tiruchirapalli 620 001.
WITH
(i) Excise Appeal No.40767 of 2019 (M/s. Rane Brake Lining Ltd.)
(ii) Excise Appeal No.40768 of 2019 (M/s. Rane Brake Lining Ltd.)
(iii) Excise Appeal No. 40769 of 2019 (M/s. Rane Brake Lining Ltd.)
(iv) Excise Appeal No. 40770 of 2019 (M/s. Rane Brake Lining Ltd.)
(v) Excise Appeal No.40771 of 2019 (M/s. Rane Brake Lining Ltd.)
(vi) Excise Appeal No.40772 of 2019 (M/s. Rane Brake Lining Ltd.) (Arising out of Order-in-Appeal No.35 to 41/2019 (TRY) dt. 05.02.2019 passed by the Commissioner of GST & Central Excise (Coimbatore), Circuit Office @ Tiruchirappalli)
(vii) Excise Appeal No.40773 of 2019 (M/s. Rane Brake Lining Ltd.)
(viii) Excise Appeal No.40774 of 2019 (M/s. Rane Brake Lining Ltd.)
(ix) Excise Appeal No.40775 of 2019 (M/s. Rane Brake Lining Ltd.) 2
(x) Excise Appeal No.40776 of 2019 (M/s. Rane Brake Lining Ltd.)
(xi) Excise Appeal No.40777 of 2019 (M/s. Rane Brake Lining Ltd.)
(xii) Excise Appeal No.40778 of 2019 (M/s. Rane Brake Lining Ltd.)
(xiii) Excise Appeal No.40779 of 2019 (M/s. Rane Brake Lining Ltd.) (Arising out of Order-in-Appeal No.42 to 48/2019 - TRY (CX)) dt. 05.02.2019 passed by the Commissioner of GST & Central Excise (Appeals), Coimbatore), Circuit Office @ Tiruchirappalli) APPEARANCE:
Ms. S. Sridevi, Advocate for the Appellant Shri B. Balamurugan, AC (AR) for the Respondent CORAM:
HON'BLE MS. SULEKHA BEEVI C.S., MEMBER (JUDICIAL) FINAL ORDER NOs. 40906-40919 / 2019 DATE OF HEARING: 10.07.2019 DATE OF DECISION: 10.07.2019 The brief facts of the case are that the appellants are engaged in manufacture of automobile brake lining etc. and are registered with the Central Excise Department. During the course of verification of accounts, it was noticed that appellants have availed credit of service tax paid on outward transportation of goods upto the buyer's premises. The department was of the view that the said credit was ineligible for which SCN was issued for different periods proposing to 3 disallow credit and also for recovery of the same along with interest and for imposing penalties. After due process of law, the original authority confirmed the demand, interest and also imposed penalties. In appeal, the Commissioner (Appeals) upheld the demand and interest but however, set aside the penalties imposed. Hence these appeals.
2. On behalf of the appellant, Ld. Counsel Ms. S. Sridevi appeared and argued the matter. She submitted that the issue involved in all these appeals is same. The appellant had availed GTA services for the purpose of transporting the goods from their factory to the buyer's premises. This was done as the sale was on F.O.R basis as reflected from the purchase orders. The terms and conditions in the purchase order is that the goods have to be delivered to the buyer's premises. Thus, appellants have included the freight charges in the assessable value while discharging excise duty. In these circumstances, the place of removal is the buyer's premises as the sale takes place at the buyer's premises. In this regard, she relied upon the decision of the Hon'ble Apex Court in the case of Roofit Industries Ltd. - 2015 (319) ELT 221 (SC). It is argued by her that the department has erroneously taken the place of removal as the factory gate of the appellant relying upon the decision in Ispat Industries. Since the sale was on F.O.R basis and the appellants have included the freight in the assessable value, the place of removal is the buyer's premises. She relied upon the recent decision of the Tribunal in the case of Genau Extrusions Ltd. Vs CGST & Central Excise vide Final Order No.40900/2019 dt. 04.07.2019. 4
3. Ld. A.R Shri B. Balamurugan supported the findings in the impugned order.
4. Heard both sides.
5. The issue is with regard to eligibility of credit on outward transportation of goods upto the buyer's premises. On perusal of the Order-in-Original, it is seen that the purchase orders state that one of the terms and conditions for sale is that the goods have to be delivered at the customer's place understanding that the buyer's premise is the place of removal. The appellants have also included the freight charges in the assessable value while discharging excise duty. After appreciating these facts, I am of the view that the as per the decision in Roofit Industries Ltd. (supra), the place of removal can only be buyer's premises. The Hon'ble Apex Court in the case of CCE Vs Ultratech Cement Ltd. - 2018-TIOL-42-SC-CX has held that credit on outward transportation would be eligible upto the place of removal. In the present case, the place of removal being buyer's premises, as settled in the case of M/s.Roofit Industries Ltd. (supra), I am of the view that appellants are eligible for credit. The same has been discussed by the Tribunal in the final order in the case of Genau Extrusions Ltd. cited supra. The relevant portion of the said order is reproduced as under :
"5. The issue is whether the appellant is eligible for the credit of Service Tax paid on Outward Transportation of Goods up to the buyer's premises.
6.1 On perusal of records as well as the purchase orders, it is seen that the sale is on FOR basis. The authorities below have disallowed the credit holding that there is no evidence to establish that the sale is on FOR basis. It is not necessary that there should be a separate contract for supply of goods. The parties can agree to the terms and conditions of the sale in the purchase orders itself. This becomes a concluded contract when the offer is accepted by the supplier/buyer. Therefore, when the purchase orders itself 5 show that the condition for sale is FOR basis, the observations made by the authorities below that the appellant has failed to produce any evidence/contract establishing that they have borne the freight charges, insurance, etc., is without any factual basis and unacceptable.
6.2 Further, in the present case, letters/certificates have been obtained by the appellant from the purchasers of the goods showing that the purchasers have not paid any freight charges separately. This strongly implies that the appellants have borne the freight charges and have included it in the assessable value on which Excise Duty has been discharged by them.
6.3 From these facts, I am of the view that the decision of the Hon'ble Apex Court in the case of M/s. Roofit Industries Ltd. (supra) will apply and the place of removal is the buyer's premises. In such circumstances, the decision of the Tribunal in the case of M/s. Ultratech Cement Ltd. - 2019 (2) T.M.I. 1487 (supra) squarely applies. As rightly argued by the Ld. Counsel for the appellant, the Hon'ble Apex Court in the case M/s. Ultratech Cement Ltd. - 2018-TIOL-42- SC-CX (supra) has observed that credit on Outward Transportation of Goods will not be eligible beyond the place of removal. In the present case, the place of removal being the buyer's premises, the appellant is eligible for credit. The Tribunal in the case of M/s. Harita Fehrer Ltd. Vs. Commissioner of G.S.T. & Central Excise, Salem vide Final Order No. 40894/2019 dated 02.07.2019 has considered this issue and allowed the credit in favour of the assessee." After appreciating the facts, as well as the evidence and following the decisions cited supra, I am of the view that disallowance of credit is unjustified. The impugned orders are set aside. Appeals are allowed with consequential benefits, if any, as per law.
(Dictated and pronounced in open court) (SULEKHA BEEVI C.S.) MEMBER (JUDICIAL) gs