2022 (5) TMI 380 - AT - Central Excise

Appeal granted for cenvat credit on service tax for outward freight

M/s Shree Rajasthan Syntex Ltd. (Formerly known as Shree Shyam Filaments) Versus Commissioner, Central Goods and Service Tax, Rajasthan

The appeal centered on the appellant's entitlement to cenvat credit of service tax on outward freight during a specific period, post an amendment in the ... CENVAT Credit - input services - outward freight - sale on FOR basis - period 01.04.2008 to March, 2009 - HELD THAT:- The appellant have admittedly made sales on FoR destination basis. Further, it is the appellant who have borne the incidence of freight and has paid the service tax on the same. Further it is held that the place of removal is the premises of the buyer, and accordingly in terms of the amended provision in Rule 2(l), the appellant is entitled to cenvat credit on outward transport under dispute, the same has been incurred upto the place of removal. CENVAT Credit allowed - appeal allowed - decided in favor of appellant. Issues:1. Whether the appellant rightly took cenvat credit of service tax on outward freight during a specific period.2. Interpretation of the definition of input service post an amendment from 01.04.2008.3. Entitlement to cenvat credit for outward transportation based on the place of removal.Analysis:1. The primary issue in this appeal revolved around the appellant's entitlement to cenvat credit of service tax on outward freight during a specific period. The ld. Commissioner (Appeals) allowed a portion of the demand related to service tax paid on transportation of finished goods, but a subsequent amendment in the definition of input service raised questions regarding the appellant's eligibility for cenvat credit for a different period.2. The amendment in the definition of input service from 01.04.2008 was a crucial factor in determining the appellant's entitlement to cenvat credit for the period April 2008 to March 2009. The learned Commissioner (Appeals) referred to a ruling by the Hon’ble Supreme Court in a specific case, which influenced the decision that the appellant was not entitled to cenvat credit during that period.3. The final issue focused on the interpretation of the place of removal concerning the appellant's sales made on FoR destination basis. The appellant's contention, supported by evidence from purchase orders and invoices, emphasized that the place of removal was the premises of the buyer, justifying their entitlement to cenvat credit on outward transportation. The Tribunal, after considering the arguments from both sides, concluded that the appellant bore the freight costs and paid the service tax, establishing the place of removal as the premises of the buyer and allowing the appeal to set aside the impugned order.In conclusion, the judgment delved into the nuances of cenvat credit eligibility, the impact of legal amendments, and the significance of the place of removal in determining entitlement to such credits, ultimately ruling in favor of the appellant based on the specific circumstances and evidence presented.