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2016 (6) TMI 818 - CESTAT HYDERABAD

2016 (6) TMI 818 - CESTAT HYDERABAD - 2016 (45) S.T.R. 262 (Tri. - Hyd.) - Cenvat Credit - service tax paid on GTA services - place of removal of finished goods - Held that:- On perusal of para11 and para 15 of the agreement as noticed above, it is very much clear that sale is on FOR(Free on Road) basis. It is clearly stated that price is inclusive of freight charges. The invoice also clearly declares that goods are sold for delivery on FOR basis and that ownership responsibility continues till .....

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ellants have succeeded in establishing that the sale is on FOR basis and place of removal is the customerís premises. On such score, the Board Circular is binding on the department and the denial of credit is unjustified. - Credit allowed - Decided in favor of assessee. - E/27135 TO 27137/2013 - A/30345-30347/2016 - Dated:- 19-4-2016 - Ms. Sulekha Beevi, Member(Judicial) Shri Nitesh & Shri Karan Talwar, Advocates for the Appellant Shri Kamal Puggal, AR for the Respondent ORDER The issue invo .....

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besides imposing penalty of ₹ 14,00,000/- under Rule 15(1) of Cenvat Credit Rules, 2004. An amount of ₹ 9,73,999/- along with interest was confirmed for the period February, 2009 to May, 2009 besides imposing penalty of ₹ 5,00,000/-. An amount of ₹ 17,89,955/- was confirmed along with interest thereon for the period October, 2010 to March, 2010 besides imposing penalty of ₹ 8,00,000/-. Being aggrieved by these orders, the appellants filed appeal before the Commissi .....

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ar that the place of removal is the customers premises. The buyer places order on FOR(Free on Road) basis which is clear from the invoices. In the CBEC circular No.97/8/2007-ST dated 23-08-2007, the Board has clarified that there may be situations where the manufacturer /consignor may claim that the sale has taken place at the destination point based on terms and conditions of the sale contract/agreement. The circular lays down three conditions to be fulfilled and that in such situations credit .....

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at the factory. The learned counsel submitted that this option was never exercised and all the invoices would show that sale was on FOR basis. That authorities below erred in holding that as per para 12 when payment is made against supply orders, the ownership in goods is transferred to the distributor on making payment. He submitted that para 12 of agreement only lays down the mode of payment and has nothing to do with the freight charges to be paid. To fortify his arguments, the learned couns .....

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g thrust upon para 12 of the agreement. He contended that as per para 12 it is stated that sale and delivery of beverages is agreed to be on payment by cash/demand draft. That this necessarily means payment has to be made before sale and delivery and that therefore, the ownership has passed to the buyer at the time of payment. That the place of removal would then be the factory gate and not the customers premises. He supported the findings in the impugned order and pleaded that the appeal may b .....

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Para 11: …… Sale and Delivery by the Company shall be deemed to be complete if the Company makes the products available for delivery purposes at the ware house or godown or any other designated place of the Distributor. Receipt of beverages shall be acknowledged by the authorised representative of the Distributor. The price charged by the Company in their invoice shall be inclusive of freight. The risk of any loss or damage to the products during transportation shall be the respon .....

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he Distributor/Company from time to time. Such payment against the sale shall always be the essence of the supply order which Company may accordingly and on basis thereof accept to execute wholly or in part on receipt of a supply order from the Distributor. Para 15 : The Company has agreed to provide the Distributor an amount in lieu of breakage of the Beverages, if any, occurring during transportation and/or till the time that sale and delivery on part of the Company is held to be complete with .....

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