Custom, Excise & Service Tax Tribunal
M/S Vir Alloys & Steel Co. Pvt. Ltd vs Commissioner Of Central Excise, ... on 3 August, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. IV Appeal No. ST/172/09 (Arising out of Order-in-Appeal No. JAK (61)99/09 dated 23.3.2009 passed by the Commissioner of Central Excise & Customs (Appeals), Aurangabad). For approval and signature: Honble Shri Ashok Jindal, Member (Judicial) ======================================================
1. Whether Press Reporters may be allowed to see : No 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 : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy : Seen of the order? 4. Whether order is to be circulated to the Departmental : Yes authorities? ====================================================== M/s Vir Alloys & Steel Co. Pvt. Ltd. Appellants Vs. Commissioner of Central Excise, Aurangabad Respondent Appearance: Shri C.S. Biradar Advocate for Appellant Shri S.M. Vaidya JDR for Respondent CORAM: SHRI ASHOK JINDAL, MEMBER (JUDICIAL) Date of Hearing: 03.08.2010 Date of Decision: 03.08.2010 ORDER NO. WZB/MUM/2010 Per: Shri Ashok Jindal, Member (Judicial)
The appellants have filed this appeal against denial of input service credit on Good Transport Agency (GTA) Service. During the course of investigation, if was found that the appellant has availed CENVAT credit of service tax on outward freight upto the place of buyer, which is beyond the place of removal of the factory of the appellant. A show-cause notice was issued for denial of CENVAT credit along with interest and a proposal for penalty. Lower authority has confirmed the demand in show-cause notice. Aggrieved from the same, the appellants are before me.
2. The learned Advocate for the appellants submits that in this case the appellants were selling their finished goods at a price which is inclusive of transportation cost and the goods required to be delivered at the buyers end. Hence, the transportation cost forms a part of the assessable value. Hence, the appellant is entitled for input service credit on outward freight charges. He also submitted that as per Circular No. 97/8/2007-ST dated 23.8.2007, it was clarified that the assessee is entitled to input service credit if the assessee qualifies the following conditions: -
(i) the ownership of goods and the property in the goods remained with the seller of the goods till the delivery of the goods in acceptable condition to the purchaser at his door step;
(ii) the seller bore the risk of loss of or damage to the goods during transit to the destination; and
(iii) the freight charges were an integral part of the price of goods.
He further submitted that as held by the Honble Punjab & Haryana High Court in the case of Ambuja Cements Ltd. Vs. UOI 2009 (236) ELT 431 (P&H) that the circular is having the retrospective effect also and in this case, the ownership of the goods remain with the appellant till the delivery of the goods accepted by the buyers at their door step. The goods were transported at the risk of the appellants and freight charges were also an integral part of the finished goods. Hence, the appellants qualify all the conditions of the above mentioned circular and the CENVAT credit has rightly been availed by them. Accordingly, the impugned order is to be set aside.
3. On the other hand, learned DR submitted that in this case, the appellants have not produced the documents showing that the ownership of the goods remained with the appellants till the delivery of the goods to the buyers. Moreover, they have not produced any insurance bills/receipt for the transit insurance that is the main condition to show that the ownership of the goods was with appellants till delivery of the goods to the customers end. They have also not filed any evidence in form of Chartered Accountant certificate to explain the above facts. Hence, in the absence of such documents, it is not established that the ownership of the goods was remained with the appellants.
4. Heard both sides.
5. On careful examination of the submissions made by both the sides, I find that the circular dated 23.8.2007 is applicable to this case and if the appellants satisfy the condition of the said circular, they are entitled for input service credit. It is true that the appellants have not produced a certificate from the Chartered accountant with regard to the ownership of the goods during transportation, but the appellants have produced purchase orders showing that the goods are to be delivered at buyers end and the transportation cost shall form the part of the assessable value. To ascertain the ownership of the goods during transportation, the Chartered Accountants certificate is required and the same is to be verified. Accordingly, the matter needs verification. Hence, I remand back the matter to the adjudicating authority to ascertain the above facts and if it is found to be correct, the credit is to be allowed. Accordingly, the impugned order is set aside and the appeal is allowed by way of remand with a direction to the adjudicating authority to pass the after verifying the documents as directed herein above by giving a reasonable opportunity to the appellants to present their case.
(Pronounced in Court) (Ashok Jindal) Member (Judicial) Vks/ 4