2010 (9) TMI 336

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..... r India (P) Ltd., M/s. Meenakshi Polymers as OE components. The purchase orders placed by their buyers were on FOR destination basis. The appellants, accordingly, took credit of service tax paid on outward freight involved in transporting the final products from their factory gate to the premises of the buyers. The original authority held that such transportation involved from factory gate to the buyers premises cannot be treated as input services and accordingly denied the credit and confirmed a demand of Rs. 61,950/- alongwith interest and imposed equal amount as penalty under Section 11AC of the Act. Commissioner (Appeals) has upheld the order of the original authority. 4. Learned Advocate for the appellant submits that the purchas .....

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..... the time and place of removal. The appellants have chosen to entertain a purchase order on FOR destination basis and chosen to pay excise duty including the freight and insurance involved in transporting the goods from their factory gate to the premises of the buyers. Merely on this ground, the goods transporting agency services used for transporting goods from the factory gate to the premises of the buyers cannot become input services for the appellant. It cannot be disputed that in respect of buyer, the automotive parts supplied by the appellants are inputs and the transportation involved from factory gate of the appellants to the buyer's premises will be input services for the said buyers. It may not be appropriate and proper to conside .....

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..... n the case of Ambuja Cements Ltd. has rightly not been extended to the appellants. Thus, the appeal is liable for rejection on merit. 11. However, the submissions of the learned Advocate that there were decisions of the Tribunal including by Larger Bench holding that service tax paid on outward freight involved is eligible for cenvat credit as input services. Therefore, the belief entertained by the appellants that the said services were inputs services for them and that they were eligible for the credit has to be held as bona fide as claimed by them. In view of the above, there is no justification for invoking extended period of limitation. Inasmuch as show cause notice has been issued only on16-7-2007demanding the duty relating to t .....

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