Custom, Excise & Service Tax Tribunal
M/S. New Allenberry Works vs Cce, New Delhi on 25 February, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
COURT NO. III
Excise Appeal No. 1995,157-158/2011-EX[SM]
[Arising out of Order-In-Appeal No. 42,201-202/CE/Appl./DLH-IV/2011 dated 13.05.2011 passed by CCE, Indore]
For approval and signature:
Honble Ms. Archana Wadhwa, Judicial Member
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3
Whether Their Lordships wish to see the fair copy of the Order?
Seen
4
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. New Allenberry Works Appellant
Vs.
CCE, New Delhi Respondents
Appearance:
Shri Y.S.Kumar, Advocate for the Appellant Shri B.B.Sharma, CA for the Respondent Coram: Honble Ms. Archana Wadhwa, Judicial Member Date of Hearing: 25.02.2014 FINAL ORDER NO. 50859-50861/2014 Per Ms. Archana Wadhwa:
All the appeals are being disposed of by a common order as the issue involved is the identical. The disputed issue involved is whether Cenvat credit of service tax can be taken for the outward freight for excisable goods delivered by the appellants at the premises of their buyer M/s. Mahindra and Mahindra. The period involved is November, 2009 to March, 2010. The contention of the appellant is that they paid excise duty on the value inclusive of freight and the contract was for supply of goods at destination on FOR destination basis. The issue has been decided against the appellants by the lower authorities for the reason that the appellants were not able to show that they had taken insurance for the goods during transportation from the factory to the premises of the buyer. The Counsel relies on the decision of Ambuja Cement Vs. CCE, 2009 (236) ELT 431(P&H) and points out that since the excise duty was paid on value inclusive of freight, he should be allowed to take Cenvat credit. As the agreement with the buyer was to supply goods at the premises of the buyer, it is evident that the risk in the goods was with the appellant till delivery of the goods to buyer. The seller had the option to bear the risk either by taking insurance policy or incurring loss on account of damages if any. How the risk is born is actually a matter of business decision and that cannot be a reason for denying the Cenvat credit.
2. After considering the submissions made by both the sides, I find that the issue is no more res-integra and stands covered by the decision of the Honble Punjab & Haryana High Court in the case of M/s. Gujrat Ambuja Cement Ltd. referred supra. Where the place of delivery of the goods is the customer premises and the freight is born by the manufacturer, the placed of removal has to be held as the customers factory gate. I find that the Board has also clarified the issue vide Circular No. F/137/85/2007-CX-IV dated 23.08.2007. Even after the amendment of the definition of input services with the fact 01.04.2008, replacing the words from the place of removal to up to the removal, the place of removal get extended up to the buyers premises in case of FOR sales and as such the said amendment would not made any difference, where the sales are on FOR basis. The appellant have rightly contended that even in terms of sale of goods Act 1932, goods are sold with the ownership and risk and transfer takes place on the point of delivery of the goods to the buyers. In the case of FOR destination sales, the ownership and risk is transferred when the seller manufacturer delivers the goods to the buyer at his premises. As such, I find no reasons to deny the Cenvat credit of service tax paid on the transportation of goods. Accordingly, all the impugned order set aside and appeal is allowed with consequential relief to the appellant.
(Pronounce in the open Court) (Archana Wadhwa) Member (Judicial) Jyoti*