2022 (5) TMI 472 - AT - Central Excise

Appellant entitled to Cenvat credit for service tax on transportation to buyer's premises

The appellant, M/s. Hindustan Zinc Ltd., was held entitled to cenvat credit of service tax paid for availing Goods Transport Agency Service for outward ... CENVAT Credit - input services - service tax paid for availing the Goods Transport Agency Service, for despatching their finished goods (outward transportation) on FOR destination basis to their buyers - place of removal - HELD THAT:- In the facts and circumstances of this case, the ‘place of removal’ is the premises of the buyer, not the factory gate of the buyer, as the finished goods are cleared by the appellant on ‘FOR destination basis’. The appellant is entitled to cenvat credit on the GTA service for outward transportation of the goods on FOR destination basis - Appeal allowed - decided in favor of appellant. Issues Involved:Entitlement to cenvat credit of service tax paid for availing Goods Transport Agency Service for despatching finished goods on FOR destination basis.Analysis:The primary issue in this appeal was whether the appellant, M/s. Hindustan Zinc Ltd., is entitled to cenvat credit of service tax paid for availing the Goods Transport Agency Service for outward transportation of finished goods on FOR destination basis to their buyers. The appellant had paid the GTA charges for the services and taken cenvat credit of the tax amount paid on the reverse charge basis. The Revenue contended that the 'place of removal' was the factory gate, not the premises of the buyer, leading to a dispute regarding the entitlement to cenvat credit.The appellant's counsel argued that the appellant had paid excise duty on the basic sale price, which included the element of transportation up to the buyer's premises. They presented sample purchase orders and invoices demonstrating that the pricing was FOR destination basis, with no separate charges for transportation to the buyer's premises. The counsel contended that based on these facts, the appellant was entitled to cenvat credit of the GTA service under dispute.The Revenue, on the other hand, relied on the impugned order and referred to relevant legal provisions and Circular No.1065/4/2018-CX, emphasizing the definition of 'place of removal' and the general principle that cenvat credit is allowable up to the place of removal on outward transportation. The Circular highlighted various judgments of the Hon'ble Supreme Court regarding the confusion surrounding the issue and directed that past cases should be decided accordingly.After considering the arguments from both sides, the Hon'ble Member (Judicial) concluded that in the present case, the 'place of removal' was deemed to be the premises of the buyer, not the factory gate, as the goods were cleared on FOR destination basis. Therefore, the appellant was held entitled to cenvat credit on the GTA service for outward transportation of goods on FOR destination basis. Consequently, the appeals were allowed, the impugned order was set aside, and the appellant was granted consequential benefits in accordance with the law.