Custom, Excise & Service Tax Tribunal
M/S. Forace Polymer Pvt. Ltd vs Cce & St, Meerut-I on 24 May, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing/Decision:24.05.2016
Excise Appeal No.50049/2015 (SM)
[Arising out of Order-in-Appeal No.56/CE/ dated 7.5.2008 passed by the Commissioner of Central Excise, New Delhi]
For Approval and Signature:
Honble Shri B. Ravichandran, Member (Technical)
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Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
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Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
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Whether Their Lordships wish to see the fair copy of the Order?
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Whether Order is to be circulated to the Departmental authorities?
M/s. Forace Polymer Pvt. Ltd. Appellants
Vs.
CCE & ST, Meerut-I Respondent
Appearance:
Rep. by Shri Rajesh Gupta, CA Advocate for the appellant. Rep. by Shri M.R. Sharma, DR for the respondent. Coram: Honble Shri B. Ravichandran, Member (Technical) Final Order No.51918/2016 Dated:24/05/2016 Per B. Ravichandran:
The appellants are engaged in the manufacture of Resin, Catalyst, etc. liable to central excise duty. They are availing cenvat credit of duty paid on capital goods and input services. The Revenue entertained a view that the appellants availed cenvat credit of service tax paid on GTA services on outward transport and the same is not permissible as the sale was on ex factory basis. Accordingly, proceedings were initiated to recover the credit availed on outward transport. The Original Authority confirmed the demand of such ineligible cenvat credit amounting to Rs.41,95,251/- and imposed equal amount of penalty on the appellant. On appeal, the Commissioner (Appeals) confirmed the said order and rejected the appeal. Aggrieved by this order, the appellant filed this appeal.
2. Ld. Consultant appearing on behalf of the appellants submitted that as evident from the purchase order received from the various customers, the transactions are on FOR destination basis. The invoices raised for the final products are on the basis of FOR destination basis, which includes insurance, transportation and incidental cost, if any. The excise duty is paid on such price. The goods cleared from their factory, through transit and till delivery to the buyer at their premises, remained property of the appellant only. On acceptance of the goods upon delivery in the buyers premises, the payment is released. The property in goods remained with the appellant and as such, they are eligible for input credit paid on transportation of their final products. Ld. Consultant relied on the decision of the Tribunal in the case of Gujarat Ambuja Cements Ltd - 2007 (6)STR 249 (Tribunal-Delhi) and also in the case of M/s. Ultratech Cements Ltd. - 2007 TIOL- 429-CESTAT-AHM. Reliance was also placed on various other decided cases including decision of Punjab & Haryana High Court in the case of Ambuja Cements Ltd. - 2009 (236) ELT 431, Honble Gujarat High Courts decision in the case of Guardian Plasticote Ltd. - 2011 (273) ELT 189 and Karnataka High Courts decision in the case of Madras Cements Ltd. - 2015 (40) STR 645 (Karnataka).
3. Ld. AR contested the submissions made by the appellant and stated that the reliance placed by the Commissioner (Appeals) on the decision of Kolkata High Court in Vesuvious India Ltd. - 2014 (34) STR 26 (Kolkata) is correct. He further submitted that outward transportation of the goods upto the premises of buyers is not input service in terms of Rule 2 (l) of Cenvat Credit Rules, 2004.
4. Heard both the sides and examined the appeal records.
It is seen that in respect of appellants own case, for the subsequent period, the Commissioner (Appeals-I), Meerut vide order dated 2.2.2016 held that the delivery was FOR destination basis and the insurance was to be done at the vendors cost and as such, evidencing that the property in goods passed on from the appellant to the buyer at the buyers end. The Commissioner placed reliance on the decision of the Andhra Pradesh High Courts decision in the case of Grey Gold Cement - 2014 (34) STR 809 (AP).
5. The Tribunal in the case of Bajaj Hindustan - 2015 (40) STR 281 (Tribunal-Delhi) held that when the cost of transportation and insurance is borne by the assessee, he was the owner of the goods till it reaches the premises of the buyer and the credit on outward transportation service is rightly eligible. The Honble Karnataka High Court in the case of Madras Cements Ltd. (supra) examined the issue in detail and held that when the sale is concluded only after the delivery of the goods in the buyers premises, the assessee will be entitled for the benefit of credit of service tax paid on outward transportation of the goods even after 1.4.2008. It is seen that considering the large number of decisions holding in favour of the assessee regarding entitlement of cenvat credit on outward transportation and also considering that in appellants own case, the matter was decided in their favour based on examination on factual evidence by the Commissioner (Appeals), I find that the impugned order cannot be sustained. Accordingly, the impugned order is set aside and the appeal is allowed.
[Operative portion already pronounced in open court] ( B. Ravichandran ) Member (Technical) Ckp.
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