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of <h1>Dispute over Cenvat credit on freight service tax. Tribunal rules in favor of appellant.</h1> <h3>M/s. S.G. SNACKS INDIA PVT. LTD. Versus COMMISSIONER OF GST & CENTRAL EXCISE, MADURAI</h3> M/s. S.G. SNACKS INDIA PVT. LTD. Versus COMMISSIONER OF GST & CENTRAL EXCISE, MADURAI - TMI Issues:1. Availment of ineligible Cenvat credit on service tax paid on freight for outward transportation of goods.2. Disallowance of credit by the original authority and Commissioner (Appeals).3. Dispute over who paid the freight charges - appellant or principal manufacturer.4. Interpretation of place of removal for excise duty purposes.5. Application of relevant case laws and tribunal decisions.Issue 1: Availment of ineligible Cenvat credit on service tax paid on freight for outward transportation of goodsThe audit revealed that the appellants had availed ineligible Cenvat credit on service tax paid on freight for outward transportation of goods. A show-cause notice was issued for the recovery of the credit along with interest and penalty. The original authority disallowed the credit, leading to the appeal.Issue 2: Disallowance of credit by the original authority and Commissioner (Appeals)The original authority disallowed the credit and ordered its recovery along with interest, imposing a penalty of Rs. 4,68,860. The Commissioner (Appeals) upheld this decision, prompting the appellant to file an appeal challenging the disallowance of credit.Issue 3: Dispute over who paid the freight charges - appellant or principal manufacturerThe appellant, a contract manufacturer, argued that the freight charges were paid by the principal manufacturer on their behalf. They contended that the freight charges were included in the assessable value and, therefore, the credit on service tax for outward transportation of goods was rightfully availed by them. The Revenue, however, maintained that the freight charges were paid by the principal manufacturer, leading to the disallowance of credit.Issue 4: Interpretation of place of removal for excise duty purposesThe discussion revolved around determining the place of removal for excise duty purposes. It was established that the freight charges were borne by the appellant and included in the assessable value, making the depot or buyer's premises the place of removal. Citing relevant case law, it was argued that the credit on outward transportation up to the place of removal would be eligible when freight charges are part of the assessable value.Issue 5: Application of relevant case laws and tribunal decisionsThe Tribunal referred to previous decisions, including the case of M/s. Kohinoor Biscuit Products Vs Commissioner of Central Excise, to support the disallowance of credit based on the payment of freight charges. However, the Tribunal also cited the case of Commissioner of Customs & Central Excise Vs M/s. Roofit Industries Ltd. and M/s. Genau Extrusions Ltd. Vs CGST & CE to justify the eligibility of credit when freight charges are included in the assessable value.In conclusion, after analyzing the facts and evidence, the disallowance of credit was deemed unjustified, and the impugned order was set aside. The appeal was allowed with consequential reliefs, if any.This summary provides a detailed analysis of the judgment, covering all the issues involved and the arguments presented by the appellant and the Revenue. It also highlights the application of relevant case laws and tribunal decisions in reaching the final decision.
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