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2015 (1) TMI 851 - AT - Central ExciseAvailability of credit on freight charges incurred for FOR destination sale - Imposition of interest and penalty - Held that:- Appellants have failed to produce any evidence before this authority as well as the adjudicating authority that all the aforementioned three conditions were satisfied by the appellants. In this regard the contention of the appellants is that in fact in respect of the said transportation of the appellant’s products to the buyer’s premises, the appellants had made the payment of the transportation charges; thus, they (appellants) were responsible for the delivery of the goods to the buyer’s premises; this fact indicates that the sale/delivery of the goods was on the FOR basis and therefore, the credit of service tax on such service of outward transportation is admissible to the appellants. However, the appellants could not adduce any evidence of FOR destination sale viz. copy of the relevant agreement entered into between appellants and the concerned buyers, sale invoices etc. Merely on the ground that the appellant-assessee arranged the transportation for delivery of the goods to the buyer’s premises, they cannot be permitted to claim such transportation as an input service under Rule 2(1) of the Cenvat Credit Rules, 2004. In view of the above facts and rulings, I am inclined to hold that the said input service credit of ₹ 1,47,108/- on such service of outward transportation is not admissible to the appellants. Therefore, the above demand of ₹ 1,47,108/- and interest thereon is justified and hence the same is upheld. - Thus intention to avail fraudulent credit could not be imputed. I find that various forums have taken different stand and certainly on the issue was not there. I would have agreed with non invokation of penal provisions in the present case as per counsel’s contention but facts indicated in preceding paragraphs do not lead to conclusion as eligibility of FOR clearance itself is negated. Penal provisions are justified in the case and penalty is rightly imposable. Following decision of Lafarge India (P) Ltd.- [2011 (1) TMI 251 - CESTAT, NEW DELHI] - Decided against assessee.
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