2008 (5) TMI 243 - AT - Service Tax

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 ... Credit of service tax on outward transportation - ownership and property in goods retained by the seller until delivery at buyer's doorstep - CBEC Circular No. 97/8/2007 paragraph 8.2 - order not in accordance with law - remand to Commissioner (Appeals) for fresh considerationCredit of service tax on outward transportation - ownership and property in goods retained by the seller until delivery at buyer's doorstep - CBEC Circular No. 97/8/2007 paragraph 8.2 - Appeal allowed by way of remand to the Commissioner (Appeals) to consider the assessee's submission based on CBEC Circular para 8.2 regarding entitlement to service-tax credit on freight where ownership remained with the seller until delivery at the buyer's premises. - HELD THAT: - The Tribunal examined the appellant's contention that service tax paid on freight for outward transportation could be taken as input credit because ownership and property in the goods remained with the seller until delivery at the buyer's doorstep, relying on paragraph 8.2 of CBEC Circular No. 97/8/2007 dated 23-8-2007. The impugned order confirmed demands without addressing this submission. Finding that the impugned order was therefore not in accordance with law, the Tribunal remanded the matter to the Commissioner (Appeals) to take a fresh decision after considering the Circular and after affording the assessee a reasonable opportunity of hearing. The Tribunal did not decide the entitlement on merits and directed fresh adjudication by the Commissioner (Appeals). [Paras 5]The appeals are allowed by way of remand for fresh decision by the Commissioner (Appeals) after considering the CBEC Circular and hearing the assessee.Final Conclusion: The Tribunal held that the impugned order was not in accordance with law for failing to consider the appellant's reliance on CBEC Circular No. 97/8/2007 para 8.2 and remanded the case to the Commissioner (Appeals) for fresh adjudication after affording the assessee a reasonable opportunity of hearing; appeals disposed of by remand. 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.