Custom, Excise & Service Tax Tribunal
M/S Mahindra Reva Electric Vehicles Pvt ... vs Commissioner Of Central Excise ... on 23 September, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/23737/2014-SM [Arising out of Order-in-Appeal No. 529/2014-CE dated 28/08/2014 passed by Commissioner of Central Excise, (Appeals-I) BANGALORE] For approval and signature: HON'BLE SHRI S.S GARG, 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? yes 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 Mahindra Reva Electric Vehicles Pvt Ltd., 122 E Bommasandra Industrial Area, Bommasandra, Bangalore-560099 Appellant(s) Versus Commissioner of Central Excise ,Customs and Service Tax BANGALORE-I POST BOX NO 5400...CR BUILDINGS, BANGALORE, - 560001 KARNATAKA Respondent(s)
Appearance:
Mr.N. Anand, Adv For the Appellant Mr Parashiva Murthy, A.R. For the Respondent Date of Hearing: 20/09/2016 Date of Decision: 23/09/2016 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 20834/ 2016 Per : S.S GARG The present appeal is directed against the impugned order dated 28.08.2014 passed by Commissioner (Appeals) vide which the Commissioner (Appeals) has rejected the CENVAT credit on transportation services, port services, CHA services and upheld the order-in-original by rejecting the appeal of the appellant.
2. Briefly the facts of the present case are that the appellants are manufacturers of battery operated electric cars falling under Central Excise Tariff Act 8703.90.10 of CETA 1985 and are availing CENVAT credit on inputs and capital goods and input services under the CENVAT Credit Rules 2004. The appellant availed CENVAT credit of service tax paid on freight charges incurred for transportation of goods exported. During the course of audit departmental officers raised objection regarding availment of CENVAT Credit. Thereafter a show-cause notice dated 25.06.2012 for the period 2008-09 and 2010-2011 and another show-cause notice dated 26.09.2012 for the period October 2011 to May 2012 demanding recovery of CENVAT credit availed on freight charges along with interest and penalty on the ground that freight charges incurred towards transportation of goods exported is not input services and not having any nexus with the manufacturing activities. Thereafter vide order dated 02.05.2013, the Assistant Commissioner confirmed the proposal in the show-cause notice. Aggrieved by the same, the appellant filed appeal before the Commissioner. The Commissioner vide order dated 28.08.2014 rejected the appeal of the appellant. Aggrieved by the said order, the appellant has filed present appeals.
3. Heard both the parties and perused the records, In the present appeal, the only issue to be considered is whether the service tax paid on freight charges incurred for transportation of goods up to the port of export is covered under the definition of input services in terms of Rule 2(l) of CENVAT Credit Rules 2004. The learned counsel for the appellant submitted that this issue is no more res integra and is settled in favour of the assessee by number of decisions of various Tribunals and he cited the following decisions in support of his submissions including the CBEC Circular No 999/6/2015-CX dated 28.02.2014.
1) CCE Vs Dynamic Industries Ltd [2014(35)STR 674(Guj)]
2)CCE Vs Bhilai Engineering Corpn Ltd [2016(41)STR 774(Tri-Del)]
3)CCE Vs Rolex Rings (P) Ltd [2008(230)ELT 569(Tri-Ahmd)]
4) Ashirwad Pipes Pvt Ltd Vs CCE [2012(31)STR 693 (Tri-Bang)]
5) CCE Vs Pokarna Ltd [2013(30) STR 379(Tri-Bang)]
6) Oriental Containers Ltd Vs CCE [2012(28)STR 397 (Tri-Mum)]
7) Rajdhani Crafts Vs CCE [2013(32)STR 607(Tri-Del) On the other hand the learned A.R. reiterated the findings of the Commissioner (Appeals).
4. In the case of export transaction where FOB price is the consideration, the goods have to be delivered on board the vessel which means the place of delivery is the port of shipment. Therefore, the place of removal automatically extends up to the port of shipment when the goods are to be delivered onboard the vessel. If that is so, the cost of transportation from the factory to the port of shipment will automatically become part of the value of the goods and whatever services have been availed up to that point would become input services and the following the ratios in the judgements cited supra, I hold that the appellants are legally entitled for the CENVAT credit of service tax paid on GTA services utilized for transportation of the export goods from the factory to the port of shipment. Accordingly, I allow the appeal with consequential relief.
(Order pronounced in open court on 23/09/2016) S.S GARG JUDICIAL MEMBER pnr 4