Appeal allowed due to non-consideration of tax circular on freight credit.

The case involved an appeal against a service tax demand for outward transportation of products. The Tribunal remanded the case to the Commissioner (Appeals) for a fresh decision after finding that the impugned order did not address a relevant circular clarifying the credit of service tax on freight. The appellant was granted a hearing opportunity, and the appeals were allowed by way of remand, setting aside the penalties imposed by the original authority on the assessee.

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Issues:
Appeal against service tax demand for outward transportation of products.

Analysis:
The judgment pertains to appeals against the demand of service tax incurred by the assessee for outward transportation of its products. The period in question is from 1-1-2005 to 31-1-2007, during which the assessee availed credit of service tax. The impugned order confirmed the demands but vacated the penalties imposed by the original authority on the assessee.

The appellant's representative argued that the appellant incurred service tax on freight for transporting goods to the factory gate of their buyers, citing Circular No. 97/8/2007 of the CBEC. This circular clarified that if the ownership and property in the goods remained with the seller until delivery at the purchaser's doorstep, the assessee could take credit for the service tax paid on the freight. The representative submitted a written submission to the Commissioner (Appeals) highlighting this circular.

The respondent argued that the appellants did not raise this point before the Commissioner (Appeals). The Tribunal considered the submissions and the Circular relied upon by the appellant. It found that the impugned order was not in accordance with the law as the Commissioner (Appeals) did not address the circular in the decision. Therefore, the case was remanded to the Commissioner (Appeals) for a fresh decision after considering the Circular. The appellant was granted a reasonable opportunity for a hearing, and the appeals were allowed by way of remand.

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