Appeal Allowed: Cenvat Credit Disallowance Reversed

The appeal challenging the disallowance of Cenvat Credit of Service Tax was allowed by the Appellate Tribunal CESTAT NEW DELHI. The appellant was not penalized, as it was established that the contractual obligation required the appellant to deliver goods at the buyer's point at their own risk and cost, separate from the contract value. The revenue's appeals were dismissed due to insufficient grounds.

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Issues: Disallowance of Cenvat Credit of Service Tax, Levy of Penalty by the Authority Below

In the judgment delivered by Mr. D.N. Panda at the Appellate Tribunal CESTAT NEW DELHI, the appellant challenged the disallowance of Cenvat Credit of Service Tax amounting to &8377; 1,68,687 plus Education cess and higher education cess related to the availment of goods transport service. On the other hand, the revenue appealed against the authority's decision of not imposing a penalty. Both appeals, sharing a common cause, were consolidated for a joint resolution.

The analysis of the tender document dated 16.07.2009 revealed that the property over the goods transferred at the point of delivery, indicating that the buyer did not own the goods at the factory gate. The contractual obligation required the appellant to deliver the goods at the buyer's point at their own risk and cost, incurring a separate transport charge with paid service tax. It was established that the contract value did not include the delivery cost, and the revenue did not attempt to include the transport cost in the assessable value. Consequently, the appellant was obligated to make delivery FOR to fulfill the contractual obligation. As a result, the appeal of the assessee was allowed, and there was no disallowance of Cenvat Credit. Conversely, the revenue's appeals were dismissed due to the lack of substantial grounds for appeal.

The judgment was dictated and pronounced in the open court, providing a clear resolution to the issues raised by both parties.

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