2017 (11) TMI 411 - AT - Central Excise

Tribunal grants CENVAT credit on courier services, overturns Commissioner's decision.

M/s Aquapharm Chemicals Pvt. Ltd. Versus CCE, Raigad

The Tribunal allowed the appellant's appeal, granting CENVAT credit on courier services post 01/04/2011. The Commissioner's decision to restrict the ... CENVAT credit - Courier services - period post 01/04/2011 - Held that: - the findings of the learned Commissioner (Appeals) are cryptic, as on one hand, he found expenditure of courier for clearance of the goods by the appellant as allowable upto 31/03/2011 and on the same facts, he observes that the appellant have not lead evidence, is erroneous and non-speaking - in view of the fact that the Department have not appealed against those Order-in-Original, I hold that the appellant is entitled to CENVAT credit also for the period subsequent to 01/04/2011, as regards courier expenses - penalty also set aside - appeal allowed - decided in favor of appellant. Issues:Allowance of CENVAT credit on courier services post 01/04/2011.Analysis:The case involved a dispute regarding the allowance of CENVAT credit on courier services post 01/04/2011. Initially, a show-cause notice was issued proposing to disallow CENVAT credit on rent a cab service and courier service for the period April 2007 to February 2012. The Additional Commissioner confirmed the demand, leading to an appeal by the appellant before the Commissioner (Appeals). The Commissioner allowed the credit on rent a cab service but restricted the availability of CENVAT credit on courier services up to 31/03/2011. The penalty was also restricted. The appellant, aggrieved by this decision, approached the Tribunal.The appellant contended that the Commissioner's decision to retain the disallowance of courier expenses post 31/03/2011 was erroneous. The appellant, engaged in manufacturing and selling chemicals, used courier services for sending sensitive documents and samples for approval sale. The appellant argued that the Department had accepted similar claims in subsequent orders, recognizing courier services as outward transportation up to the place of removal, making them eligible for CENVAT credit. The appellant provided evidence showing that freight charges were an integral part of the price of goods, supporting their claim for CENVAT credit on courier services.After considering the arguments, the Tribunal found the Commissioner's findings to be cryptic and non-speaking. The Tribunal noted that the Department had accepted similar claims in subsequent orders, where courier expenses for clearance of goods were allowed. In light of this, the Tribunal held that the appellant was entitled to CENVAT credit on courier expenses post 01/04/2011. Consequently, the Order-in-Appeal was modified to allow the credit, and the penalty imposed was deleted. As a result, the appeal was allowed in favor of the appellant.