Custom, Excise & Service Tax Tribunal
M/S Mahle Engine Components India Pvt. ... vs C.C.E. Indore on 2 August, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. III
Excise Appeal No. E/51328-51329/2016-E[SM]
[Arising out of Order-In-Appeal No. BHO-EXCUS-001-app-241-15-15-16 dated 01.03.2016 passed by CCE Indore]
For approval and signature:
Honble Mr. S.K. Mohanty, Member (Judicial)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
M/s Mahle Engine Components India Pvt. Ltd. Appellant(s)
Vs.
C.C.E. Indore Respondent(s)
Appearance:
Mr. D.K. Tyagi (Advocate) for the Appellant Mr. Dharam Singh (DR) for the Respondent CORAM:
Honble Mr. S.K. Mohanty, Member (Judicial) Date of Hearing/ Decision. 02.08.2016 Final Order No. 55451-55452 /2016 Denial of cenvat credit of service tax paid on outward freight for delivery of goods at the buyers premises is the subject matter of present dispute in both these appeals.
2. Sh. D. K. Tyagi, the Ld. Advocate appearing for the appellant submits that the purchase orders placed by the buyers of goods clearly specified that the FOR destination should be at their end and the invoices issued by the appellant clearly expressed that the freight incidence has been borne by appellant and the cost of freight has been included in the assessable value, on which Central Excise duty liability has been discharged. Since the ownership and title of the goods remained with the appellant till the time, the same are delivered at the buyers premises, cenvat credit of service tax taken on the outward freight should be available. To support his stand that cenvat credit cannot be denied in the facts of this case, the Ld. Advocate has relied on the judgment of Supreme Court in the case of CCE vs Roofit Industries Ltd. 2015 (319) ELT 221 (S.C.) and CCE Mum-III vs Emco Ltd. 2015 (322) ELT 394 (S.C.).
3. Sh. Dharam Singh, the Ld. AR on the other hand, reiterates the findings recorded in the impugned order and also relies on the judgment of Honble Supreme Court in the case of CCE Nagpur vs. Ispat Industries Ltd. 2015 (324) ELT 670 (S.C.) and judgment of Honble Calcutta High Court in the case of CCE Kolkata VI vs. Vesuvious India Ltd. 2014 (34) STR 26 (Cal.).
4. I have heard the Ld. Counsel for both sides and perused the records.
5. It is an admitted fact that the delivery terms showed in the purchase order is the FOR destination buyers site and also based on the terms of the purchase order, the appellant had effected supplies, showing freight to be billed to the seller. The documents available in the file clearly indicate that the ownership/ title of the goods remained with the seller, the appellant herein, till the same reach the destination i.e. the buyers premises. The said fact is evident that the cost towards the transit insurance has been borne by the appellant. Thus, service tax paid on the outward transportation of the goods is confirming to the definition of input service contained in Rule 2(l) of the Cenvat Credit Rules, 2004 for the purpose of availemnt of cenvat credit. I find that the Honble Supreme Court in the case of Roofit Industries (supra) and Emco Ltd. (supra) have held that when the freight and the transit insurance are borne by the appellant for delivery of the goods at the buyers premises, such place should be considered as the place of removal. The judgment of Honble Suprme Court cited by the Ld. Commissioner (Appeals) vide the impugned order in the case of Escorts JCB Ltd. vs CCE Delhi-II 2002 (146) ELT 31 (S.C.) is distinguishable from the facts of the present case inasmuch as in the said decided case the sale of goods took place at the factory gate and thus the Honble Court have held that the place of removal is not the premises of the buyer and the price is ex-factory. The judgment cited by the Ld. DR for Revenue is also distinguishable inasmuch as the price was ex-factory price, which should not be considered as the delivery price at the buyers premises. In this case, evidently the freight component has been incurred by the appellant and the same has formed the part of transaction value, on which duty liability has been discharged. Thus, in my opinion, the price at which the goods were sold to the buyers should be considered as the price for the purpose of determination of the place of removal. Since, freight is forming a part of the transaction value, the same should be considered as input service for the purpose of taking cenvat credit.
6. Therefore, I do not find any merits in the impugned orders, and thus, the same are set aside and the appeals are allowed in favour of the appellant.
(Dictated and pronounced in open court) (S. K. Mohanty) Member(Judicial) Neha 4 | Page E/51328-51329/2016-E[SM]