Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2016 (7) TMI 150

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... e denial of Cenvat credit to the tune of ₹ 85,324/-. It was already confirmed by the Original Authority vide his order dated 28/05/2014. 2. The appellant is a manufacturer of excisable goods falling under Chapter 72, 73, 84 and 86 of the Central Excise Tariff. The appellant is also liable to pay service tax on transportation of goods by road service towards inward transportation of inputs received by them and outward transportation of goods to the customer. They are required to pay this in as much as they are covered in terms of Rule 2 (1) (d) (v) in one of the categories from (a) to (g). The dispute is with reference to the service tax paid on the outward transportation of goods which has been availed as Cenvat credit considering them as input service. The view taken by the authorities below was that the Cenvat credit on outward transportation up to the premises of the buyer cannot be considered as input service within the definition given in Rule 2 (l) of the Cenvat Credit Rules, 2004, since this Rule permits credit on service tax paid for outward transportation only up to the places of removal which in this case is the factory gate. It is also pertinent to note that the .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... the manufacturer/consignor may claim that the sale has taken place at the destination point because in terms of the sale contract/agreement (i) the ownership of goods and the property in the goods remained with the seller of the goods till the delivery of the goods in acceptable condition to the purchaser at his door step; (ii) the seller bore the risk of loss of or damage to the goods during transit to the destination; and (iii) the freight charges were an integral part of the price of goods. In such cases, the credit of the service tax paid on the transportation up to such place of sale would be admissible if it can be established by the claimant of such credit that the sale and the transfer of property in goods (in terms of the definition as under Section 2 of the Central Excise Act, 1944 as also in terms of the provisions under the Sale of Goods Act, 1930) occurred at the said place . He submitted a copy of the purchase order P.O. No. 4502617 - 0 dated 12/08/2009 received by the appellant from M/s SMS India Pvt. Limited, a subsidiary of SMS Siemag, and emphasized the fact that the prices are inclusive of freight up to the buyer s premises. Accordingly, he prayed that all t .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... 6. Since the dispute revolves around the definition of input service, the said definition is reproduced below for ready reference :- The definitions as they stood before 01/4/2008 are as under :- Rule 2 (1) defines input service means any service (i) used by a provider of taxable service for providing an output service, or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products (from)* the place of removal and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research storage up to the place of removal procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry and security, inward transportation of inputs or capital goods and outward transportation up to the place of removal. [The word from was substituted by the word upto made effective from 0 .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... y in the goods pass from the seller to the buyer. Is it at the factory gate as claimed by the appellant or is it at the place of the buyer as alleged by the Revenue? In this connection it is necessary to refer to certain provisions of the Sale of Goods Act, 1930. Section 19 of the Sale of Goods Act provides that where there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred. Intention of the parties are to be ascertained with reference to the terms of the contract, the conduct of the parties and the circumstances of the case. Unless a different intention appears; the rules contained in Section 20 to 24 are provisions for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer. Section 23 provides that where there is a contract for the sale of unascertained or future goods by description and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer or by the buyer with the assent of the seller, the prop .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates