2013(01)LCX0062

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI

S.S. Kang, Vice President

CCE, Panchkula

Versus

Jamuna Auto Industries Ltd.

CENTRAL EXCISE APPEAL NO. 259 OF 2011 DECIDED ON: 28.01.2013

Cases Quoted -

Palco Metals Ltd. v. CCE, Ahmedabad 2012 (012) STR 0429 (Mentioned)

Advocated By -

Rakesh K. Mathur, A.R. For Appellant
Hemant Bajaj, Adv. For Respondents

ORDER

S.S. Kang, Vice President

1. Heard both sides.


2. Revenue filed this Appeal against the impugned order whereby the Commissioner (Appeals) held that Respondents are entitled to credit of Service tax paid in respect of outward GTA Services upto the place of buyer. The period in dispute is from April, 2009 to November, 2009.


3. Revenue filed this appeal on the ground that that the Respondents have wrongly availed the credit on the Services of GTA for outward transportation of goods beyond place of removal. Same is not covered by the definition of "input service" as provided under Rule 2(1) of CENVAT Credit Rules 2004. The contention is that the admissibility of Services of GTA in respect of outward transportation is determined by the fact as to what is the place of removal. Once the place of removal in the case of transaction is established only then it can be established as to whether the service tax paid on GTA services is available as credit under CENVAT Credit Rules, 2004 or not. In the present case, the goods are sold by the Respondent at the factory gate and hence the place of removal is the factory gate. Therefore, the Respondents are not entitled for credit in respect of the outward transportation after clearance from the factory.


4. The contention of the Respondents is that the Respondents are selling the goods in question to original manufacturer and the prices agreed upon by them with their buyers are inclusive of freight element with the direction for delivery of the same at the buyer's place. The contention is that as the freight is part of the price on which duty has been discharged, therefore, credit cannot be denied. The Respondents also relied upon the Board's Circular No. 97/8/2007 dated 23rd August, 2007 The Respondent also relied upon the decision of the Tribunal in the case of Palco Metals Ltd. v. CCE, Ahmedabad 2012 (012) STR 429.

5. 1 find that in the present case the freight is a part of the price as this fact is not in dispute. The Board therefore, issued a Circular No. 97/8/2007 dated 23rd August, 2007. The relevant portion of the above circular is reproduced below:

...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 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,


6. In view of the circular referred above and in view of the fact that as the freight is part of price, I find no infirmity in the impugned order. The appeal filed by Revenue is dismissed;

Equivalent 2013 (196) ECR 0310 (Tri.-New Delhi)