Appellate Tribunal allows cenvat credit for outward transportation in excise duty cases

The Appellate Tribunal CESTAT Ahmedabad held that in the case of a sale on FOR basis where the freight is an integral part of the price of goods on which excise duty is charged, cenvat credit for outward transportation is admissible. Citing previous Tribunal decisions and a Board Circular, the Tribunal set aside the impugned order and allowed the appeal, noting that similar conclusions had been upheld by the Gujarat High Court in previous cases such as Sanghi Industries Ltd. and Ultratech Cement Limited.

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Issues: Entitlement to cenvat credit for outward GTA

The judgment by the Appellate Tribunal CESTAT Ahmedabad dealt with the issue of whether the appellant is entitled to cenvat credit in respect of outward GTA. The appellant argued that since the sale was on FOR basis and the freight was an integral part of the value of the goods on which excise duty was charged, the credit should be admissible. The appellant relied on various judgments and a Board Circular to support their claim. On the other hand, the Revenue, represented by the Authorized Representative, reiterated the findings of the Impugned order and cited specific judgments to support their position.

The Tribunal carefully considered the submissions from both sides and examined the records. It was noted that the sale was indeed on FOR basis, and the freight was an integral part of the price of the goods on which excise duty was discharged. This fact was evident from both the Order in Original and the Order in Appeal. The Tribunal referenced specific paragraphs from these orders to highlight that the sale being on FOR basis and the freight being integral to the price of the goods were not under dispute. In light of previous Tribunal decisions and the Board Circular issued after a Supreme Court judgment, the Tribunal concluded that in the case of FOR sale, cenvat credit on outward transportation is admissible.

The Tribunal specifically mentioned the cases of Sanghi Industries Ltd. and Ultratech Cement Limited, where similar conclusions were reached and upheld by the Gujarat High Court. The Tribunal also addressed the reliance placed on a Supreme Court judgment in the case of Ultratech, stating that it had already been considered in previous cases. Ultimately, based on the facts of the present case where the sale was on FOR basis, the freight was inclusive in the price of the goods, and not charged separately to customers, the Tribunal held that the cenvat credit for outward transportation was admissible. Consequently, the impugned order was set aside, and the appeal was allowed.

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