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TMI Blog2024 (8) TMI 711X X X X Extracts X X X X X X X X Extracts X X X X ..... t paid to the transporters and were also availing cenvat credit of the service tax so paid by them treating the GTA service as an input service. It was also observed that the sale actually took place at the destination and therefore, the place of removal for the purpose of valuation was buyer's premises. Therefore, the freight amount so collected was to be part of assessable value of gods and central excise duty was to be paid on the said amount. Accordingly, show cause notice dated 22.07.2020 was issued to the appellant for recovery of central excise duty of Rs.6,70,855/- along with interest and penalty. The Adjudicating Authority vide order-in-original dated 07.03.2022 dropped the demand of central excise duty of Rs.6,70,855/- and also the penalty. 3. On reviewing the said order by the Principal Commissioner, an appeal was filed by the Revenue, which was allowed by the impugned order. Being aggrieved, the appellant has filed the present appeal before this Tribunal. 4. We have heard Shri R.K. Ambwani, Consultant, learned counsel for the appellant and Shri M.K. Chawda, learned Authorised Representative for the respondent. 5. The main contention of the appellant is that the 'plac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mes clear that the goods were to be delivered at the place of the buyer and it is only at that place where the acceptance of supplies was to be effected. Price of the goods was inclusive of cost of material, Central Excise duty, loading, transportation, transit risk and unloading charges, etc. Even transit damage/breakage on the assessee account which would clearly imply that till the goods reach the destination, ownership in the goods remain with the supplier namely the assessee. As per the 'terms of payment' clause contained in the procurement order, 100% payment for the supplies was to be made by the purchaser after the receipt and verification of material. Thus, there was no money given earlier by the buyer to the assessee and the consideration was to pass on only after the receipt of the goods which was at the premises of the buyer. From the aforesaid, it would be manifest that the sale of goods did not take place at the factory gate of the assessee but at the place of the buyer on the delivery of the goods in question." 9. In line with the decision in M/s. Roofit Industries Ltd. (supra), the Apex Court in the case of M/s. Emco Ltd. (supra) reiterated the same princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e entire scenario. The benefit which was admissible even beyond the place of removal now gets terminated at the place of removal and doors to the Cenvat credit of input tax paid gets closed at that place. This credit cannot travel therefrom. It becomes clear from the bare reading of this amended Rule, which applies to the period in question that the Goods Transport Agency service used for the purpose of outward transportation of goods, i.e. from the factory to customer's premises, is not covered within the ambit of Rule 2(l)(i) of Rules, 2004. Whereas the word 'from' is the indicator of starting point, the expression 'upto' signifies the terminating point, putting an end to the transport journey." In this context, the Apex Court also considered the Board Circular dated 23.08.2007, which was issued in clarification of the definition of "input service" as it existed on that date, i.e., it related to unamended definition and therefore, held as under:- "11. As can be seen from the reading of the aforesaid portion of the circular, the issue was examined after keeping in mind judgments of CESTAT in Gujarat Ambuja Cement Ltd., 2007 (6) S.T.R. 249 (Tribunal) and M/s. Ultratech Cement Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y was made, the appellant remained the owner of the goods. These facts clearly show that the point of sale was where the ownership of goods was transferred to the buyers or customers, and, therefore, all the expenses incurred and collected by the appellant till the buyers' premises shall be part of the assessable value under Section 4 of the Act. In this regard, we may also refer to the findings in the impugned order :- "8.1.2 It is pertinent to mention here that the respondent availed Cenvat credit of service tax paid on outward freight i.e. GTA services, which the respondent considered as 'input service' as per the definition of 'input service' under Rule 2(l) of the CENVAT Credit Rules, 2004, thus, the GTA service was treated as input service 'up to the place of removal', which is the buyer's premises. But when it comes to inclusion of freight amount (paid on outward transportation), the Respondent is taking the plea that the buyer's premises cannot be the 'place of removal'. In short, when it comes to availment of CENVAT Credit of Service Tax paid on outward transportation of excisable goods, the respondent claim buyer's premise as 'Place of Removal', but when it comes to mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined with reference to 'point of sale' with the condition that place of removal (premises) is to be referred with reference to the premises of the manufacturer. 4. Exceptions: (i) The principle referred to in para 3 above would apply to all situations except where the contract for sale is FOR contract in the circumstances identical to the judgment in the case of CCE, Mumbai-III vs Emco Ltd 2015(322) ELT 394(SC) and CCE vs M/s Roofit Industries Ltd 2015(319) ELT 221(SC). To summarise, in the case of FOR destination sale such as M/s Emco Ltd and M/s Roofit Industries where the ownership, risk in transit, remained with the seller till goods are accepted by buyer on delivery and till such time of delivery, seller alone remained the owner of goods retaining right of disposal, benefit has been extended by the Apex Court on the basis of facts of the cases." Relying on the observations of the Apex Court in Ispat Industries (supra), the Circular stated that the 'place of removal' is required to be determined with reference to point of sale with the condition that 'place of removal' (premises) is to be referred with reference to the premises of the manufacturer, however, at the same ti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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