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2016 (9) TMI 45 - CESTAT KOLKATA

2016 (9) TMI 45 - CESTAT KOLKATA - TMI - Whether service tax credit with respect to outward transportation from the factory of the appellant to the buyer's premises is admissible to the appellant or not - Central Excise duty is paid on MRP basis - all elements of cost are included in the MRP and the delivery becomes an FOR destination basis transaction - fulfillment of all conditions prescribed under CBEC circular No. 97/8/2007-ST dt 23/8/2007 - Held that:- in the present proceedings transit ins .....

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Ltd. Vs. UOI [2009 (2) TMI 50 - PUNJAB & HARYANA HIGH COURT]. Therefore, as per settled proposition of law credit of service tax paid on the outward freight during the relevant period was correctly taken by the appellant. - Decided in favour of appellant - Appeal No. E/327/2011 - ORDER No. FO/A/75907/16 - Dated:- 25-8-2016 - Shri H. K. Thakur, Member (Technical) Shri Ravi Raghavan, Adv & M/s Satabadi Chatterjee, Advocate for the Appellant Shri S. Mukhopadhyay, Suptd (AR) for the Revenue ORDE .....

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ether service tax credit with respect to outward transportation is admissible to the appellant or not. That appellant is a cement manufacturer where Central Excise duty is paid on MRP basis. That goods are delivered to the doorsteps of the customers & transit insurance is also borne by the appellant. That all elements of cost are included in the MRP and the delivery becomes an FOR destination basis transaction. That any loss in transit is borne by the appellant and ownership of goods till de .....

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orporation Ltd Vs CCE & ST [2016 TIOL-2082 CESTAT] (ii) CCE Dehradun Vs M/s Forace Polymers Pvt. Ltd. (iii) Ambuja Cement Ltd Vs UOI [2009 (236) ELT 431 (P&H)] (iv) Ultra tech Cement Ltd Vs CCE & ST Rohtak [2015 (37) ELT 364 (Tri.-Del)]. 3. Sh. S. Mukhopadhyay Suptd (AR) appearing for the Revenue relied upon the Apex Courts decision in the case of CCE & Cus Nagpur Vs. Ispat Industries Ltd [2015 (324) ELT 670 (S. C) ] to argue that buyers premises cannot be taken as a place of rem .....

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se duty on MRP basis which includes all expenses upto the place of delivery of goods to buyer s premises and in all other Cement manufacturers such credit is allowed. Appellant interalia, has relied upon the case law of P & H High Court Ambuja Cements Ltd Vs Union of India (Supra). One of the substantive question of law before Honable P & H high Court in this relied upon case law, was :- 1. Whether the service of transportation up to the customer s doorstep, in the case of FOR destinatio .....

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ur of the assessee-appellant and against the revenue. It is undisputed that the appellant being a manufacturer and consigner has paid service tax on the value of goods transported by it by road. The Central Board of Excise and Customs (CBEC) has issued a circular dated 23-8-2007 dealing with the issue concerning up to what stage manufacturer/consigner could take credit on the service tax paid on goods transported by it by road . The issue, in fact, has emerged out of the order of the Tribunal pa .....

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assigned to them in those Acts. Accordingly, reliance on Section 4 of the 1944 Act has been made where place of removal has been defined as under :- place of removal means- (i) a factory or any other place or premises of production or manufacture of the excisable goods; (ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be stored without payment of duty; (iii) A depot, premises of a consignment agent or any other place or premises from where the ex .....

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der :- ......However, there may be situations where 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 ch .....

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by the Board are binding and aims at adoption of uniform products. In that regard reliance has been rightly placed on the judgment of Hon ble the Supreme Court in the case of Paper Products Ltd. (supra) and such circulars are binding on the department. Placing reliance on earlier judgments of the Supreme Court in the cases of CCE v. Usha Martin Industries, 1997 (94) E.L.T. 460 (S.C.) = (1997) 7 SCC 47; Ranadey Micronutrients v. CCE, 1996 (87) E.L.T. 19 (S.C.) = (1996) 10 SCC 387; CCE v. Jayant .....

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he statutory provision. The ratio of the judgment of this Court further precludes the right of the Department to file an appeal against the correctness of the binding nature of the Circulars. Therefore, it is clear that so far as the Department is concerned, whatever action it has to take, the same will have to be consistent with the Circular which is in force at the relevant point of time. 10. It is, thus, evident that the revenue is precluded from challenging the correctness of the circular ev .....

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r of the goods till the delivery of the goods in acceptable condition to the purchaser at his door step. The aforesaid condition has to be considered to be fulfilled because the supply of cement by the appellant to its customer is FOR destination . The appellant also bears the freight in respect thereof up to the door step of the customer. The freight charges incurred by it for such sale and supply at the door step of the customer are subjected to service tax which is also duly paid by the appel .....

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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 upto 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 upto t .....

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s has not been transferred to the seller till the delivery of the goods in acceptable condition to the purchaser at his door step. Accordingly, even the second condition that the seller has to bear the risk of loss or damage to the goods during transit to the destination stand fulfilled. 13. The third condition that the freight charges were integral part of the excisable goods also stand fulfilled as the delivery of the goods is FOR destination price. This aspect has been specifically pointed ou .....

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se was 28/9/1996 to 31/3/2003 when Section -4 (3) (c) (iii) was not existing. This Section 43 (c) (iii) of the Central Excise Act 1944 was inserted with effect from 14/5/2003 by Section -136 of the Finance Act 2003, therefore, after 14/5/2003 the place of removal could also be the destination point of delivery where goods are sold. Secondly, Apex Court was dealing with the unamended Sec 4 (3) (c) of the Central Excise Act 1944 on valuation. Thirdly before the Apex Court the issue was neither the .....

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The main Thrust in the Revenue s appeal is the finding of the Hon ble Supreme Court in Ispat Industries Ltd. (Supra) regarding place of removal. The Hon ble Supreme Court was examining the question of valuation of excisable goods with reference to inclusion or otherwise, the freight charges from the factory gate to the buyer s premises. In the said case, admittedly, the goods were sold ex factory. The Revenue intended to include the freight element in the assessable value. The Hon ble Supreme C .....

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ry. The issue involved in the present appeal is availability of cenvat credit on the outward transportation of finished goods. admittedly, during the relevant period, there is no definition of place of removal under Cenvat Credit Rules, 2004. The definition available under Section 4 has been taken to interpret the same for credit purposes. Here, in the present case, the respondent is clearly selling their goods on the bssis of purchase order, which clearly stipulates that 100% payment will be on .....

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