2015 (10) TMI 1339 - AT - Central Excise

Appeal granted for cenvat credit on GTA outward transport service based on terms of sale evidence

Kyungshin Industrial Motherson Ltd. Versus Commissioner of Central Excise, Chennai

The Tribunal allowed the appeal, overturning the denial of cenvat credit on GTA outward transport service. The appellant successfully demonstrated through ... Availment of CENVAT Credit - GTA Services - Held that:- Both the Lower Authorities held that the place of removal is at factory gate and no evidence produced claiming that sale is on F.O.R destination basis. On perusal of the copy of the agreement dt. 24.1.2002 and copy of purchase order dt. 26.3.2010, 6.4.2010 produced by the appellant. I find that the terms of supply is inclusive of freight, loading, unloading etc. and upto the point of destination and terms of the delivery is F.O.R. destination and the unit price is inclusive of freight and other charges. The Co-ordinate Division Bench of Tribunal in the case of Ultra Tech Cement Vs CCE & ST Rohtak (2014 (10) TMI 679 - CESTAT NEW DELHI) decided the very same issue and held that credit is entitled on GTA outward transport service where the goods are sold on FOR basis. By respectfully following the ratio of the decision (supra), I hold that appellants are eligible for credit on GTA outward transport service as it is evident from the above that the sale is on FOR Destination basis - Decided in favour of assessee. Issues: Denial of cenvat credit on GTA outward transport serviceAnalysis:The issue at hand in this judgment is the denial of cenvat credit availed on GTA outward transport service amounting to &8377; 12,099. The Commissioner (Appeals) upheld the adjudication order, stating that the appellants failed to provide documentary evidence proving that the terms of sale were on F.O.R Destination basis.The appellant, represented by Shri M. Loganathan, argued that they supplied auxiliaries to a specific company, and as per the agreement, the sale price included various services up to the point of delivery on an F.O.R. basis. Documentary evidence in the form of a purchase agreement and purchase orders supported this claim. The appellant also cited a Tribunal decision in a similar case to strengthen their argument.The Revenue's Authorized Representative reiterated the findings of the impugned order, emphasizing the lack of documentary evidence provided by the appellants before the appellate authority.After hearing both sides, the Tribunal delved into the crux of the matter. The Tribunal observed that the terms of supply, as evidenced by the purchase agreement and purchase orders, included freight, loading, unloading, and extended up to the point of destination on an F.O.R. basis. Citing a previous decision in a similar case, the Tribunal concluded that the appellants were entitled to cenvat credit on GTA outward transport service since the sale was indeed on F.O.R Destination basis. Consequently, the impugned order was set aside, and the appeal was allowed. The Tribunal also disposed of the stay application in this regard.This judgment highlights the importance of providing documentary evidence to support claims related to cenvat credit eligibility and the significance of establishing the terms of sale, especially concerning transport services, to determine the entitlement to such credits.