2019 (2) TMI 1488 - CESTAT AHMEDABAD

CENVAT Credit - input services - services of Goods Transport Agency for transportation of cement - place of removal - demand was confirmed by the adjudicating authorities holding that the credit on GTA service is available as input service only up to place of removal after 01.04.2008 in terms of Rule 2 (l) of Cenvat Credit Rules, 2004 - issue under litigation - extended period of limitation - Held that:- The Appellants are clearing their goods on MRP basis in case of clearance from their depot/ stockists or to their customers and in case of sale to institutional consumers the goods are being cleared by them by applying valuation in terms of Section 4. The Appellant have annexed copies of excise invoice cum gate pass which shows that the prices are inclusive of freight and insurance and nothing extra has been charged. The goods are being cleared on FOR basis and all liabilities in respect of transportation of goods or damage to goods were on account of Appellants. They were liable for safe delivery of goods upto their customers’ doorstep. In such case when the sale of the goods is completed at the doorstep of the Customer or depot/ stockist as the case may be the point of sale shall be such doorstep.

The Chartered/ Cost Accountant has certified that the goods were sold on FOR basis by the Appellant and the freight/ damages in transit was responsibility of Appellant till the goods reached the doorstep of the Customers. Also we find that the consignment notes were raised upon the Appellant and they did not charge any amount except price of the goods from the customers - as per Circular No. 1065/4/2018 – CX dt. 08.06.2018, it is found that that as the ownership of the goods remained with the Appellants till the goods reached to the customer’s doorstep and the freight charges as well as damage to the goods till destination were borne by the Appellants, hence they are eligible for the credit of service tax paid by them on outward freight.

As regard the issue raised by the appellant that the excise duty paid on the element of freight being more than the element of cenvat credit on the outward GTA, therefore, there should not be any demand. We find force in the argument of the appellant however, since we are deciding the issue on merit, the admissibility of the Cenvat Credit on outward GTA on the basis of provision under Cenvat Credit Rules itself, we need not to deal this aspect hence, the issue related to this fact left open.

Time Limitation - Held that:- The issue was not free from doubt and right from introduction of Cenvat Scheme under Cenvat Credit Rules, the outward GTA was the matter under litigation and for that reason the Government has to come out with clarification thereafter the matter was subject to various litigation before Tribunal, Hon’ble High Courts and Hon’ble Supreme Court, therefore no malafide intention can be attributed to the appellant, therefore, wherever the demand is for extended period, the same will also not be sustainable on the ground of time bar also.

The Appellants are eligible for the credit of service tax paid on outward freight - appeal allowed - decided in favor of appellant.