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M/s. Tata Motors Ltd. Versus Commissioner of Central Excise Customs and Service Tax Bangalore

2016 (11) TMI 1178 - CESTAT BANGALORE

CENVAT credit - outward transportation of spare parts - whether the denial of CENVAT credit on the ground that the services of outward transportation does not qualify as an input service in terms of Rule 2(l)(ii) of CCR, 2004 as the same is not used directly or indirectly in or in relation to the manufacture of final products, justified? - Held that: - Cenvat credit on outward transportation has been rightly availed by the appellants in terms of Board s Circular No. 97/8/2007-S.T. dated 23.8.200 .....

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estination”, transit insurance and freight charges are borne by appellant, so credit is admissible on outward freight. - CENVAT credit allowed - appeal allowed - decided in favor of appellant. - E/21040/2014-SM - Final Order No. 21212 / 2016 - Dated:- 9-11-2016 - Shri S. S. Garg, Judicial Member For the Petitioner : Shri Anirudh. C, Advocate For the Respondent Shri Mohammed Yousuf, AR ORDER Per S. S. Garg The present appeal is directed against the impugned order dated 27.12.2013 passed by th .....

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pare part division of Bangalore unit. The appellant procured various spare parts from approved vendors or received them from the appellant s works/other SPDs. In both the cases, the vendors are paying excise duty and the appellants are availing CENVAT credit of duty paid by the vendors. Appellant also import various spare parts and are availing CENVAT credit of duty paid of CVD paid on the same. Appellant sells spare parts on door delivery basis with freight to be billed to the appellant i.e., t .....

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tep delivery. The Department issued show-cause notice dated 25.4.2012 proposing to recover CENVAT credit of service tax paid amounting to ₹ 11,23,451/- on outward transportation of spare parts during the period April 2011 to January 2012 on the ground that the services of outward transportation does not qualify as an input service in terms of Rule 2(l)(ii) of CCR, 2004 as the same is not used directly or indirectly in or in relation to the manufacture of final products. The Additional Comm .....

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ppellants submitted that Cenvat credit on outward transportation has been rightly availed by the appellants in terms of Board s Circular No. 97/8/2007-S.T. dated 23.8.2007 vide which the following three conditions have to be fulfilled : (i) The supplies made by the appellants to the customers is on FOR destination basis and ownership of goods remain with them till it safely reaches the customer s doorstep (Refers Internal Circular dated 10.4.2011); (ii) The appellants have an open insurance poli .....

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, 1944. 4.1. The learned advocate further submitted that it has been held in plethora of cases that once the conditions in the aforesaid Circular are satisfied, credit on outward transportation is to be allowed. Reliance is placed on the following decisions : (i) Hyndai Motor India Ltd. vs. Commissioner of Central Excise, Chennai [2016-TIOL-767-CESTAT-MAD] (ii) Commissioner of C.Ex., Rohtak vs. Haryana Sheet Glass Ltd. [2015 (39) S.T.R. 392 (P&H] (iii) Commissioner vs. Thiru Arooran Sugars L .....

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s fulfilled in those transactions and copies of the orders have also been enclosed with the present appeal. He also submitted that in this case, as per the Circular issued by the appellant, freight charges will be borne by the appellants and the supplies are on FOR destination basis and supply would be door delivery. He also submitted that the expression activities relating to business under Rule 2(l) of Cenvat Credit Rules, 2004 admittedly covers transportation upto the place of removal and, th .....

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