Manufacturer wins cenvat credit appeal for outward freight

The Tribunal ruled in favor of the appellant, a manufacturer of Refractory products, allowing them to take cenvat credit on outward freight under 'goods transport agency service' for transportation of final products up to the buyer's premises. The Tribunal held that until the goods reach the buyer's place, the ownership remains with the appellant, entitling them to the credit. As a result, the impugned order was set aside, and the appeal was allowed with any consequential relief.

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Issues involved:
The issue involved in the judgment is whether the appellant, a manufacturer of Refractory products, is entitled to take cenvat credit on outward freight under 'goods transport agency service' for transportation of final products beyond the factory premises up to the place of the buyer.

Comprehensive details of the judgment for each issue involved:

1. The appellant availed cenvat credit on outward freight for transportation of goods up to the place of the buyer under the 'goods transport agency service' during 2005-06 to 2008-09. The Revenue contended that the appellant is not entitled to this credit for transportation beyond the factory premises, leading to denial of the credit. The appellant challenged this denial before the Tribunal.

2. The appellant argued that until March 31, 2008, the issue was settled by the Hon'ble Karnataka High Court, which held that the input service of goods transportation service is available up to the place of removal. Referring to the decision in the case of ABB Ltd. v. Commissioner of C.Ex. & S.T., Bangalore, the appellant asserted their entitlement to cenvat credit. For the period post-April 1, 2008, the appellant contended that as they paid service tax on outward freight for transportation of final products to the buyer's premises, and retained ownership until delivery, they are not liable for service tax. Citing the case of Bharat Fritz Werner Ltd. v. CCE, Bangalore, the appellant sought to set aside the impugned order.

3. The department's Authorized Representative supported the impugned order.

4. After hearing both parties and considering their submissions, the Tribunal examined the central issue of whether the appellant, selling goods at the buyer's premises, is entitled to cenvat credit on outward freight under 'goods transport agency service.'

5. The Tribunal noted the decision of the Hon'ble High Court of Karnataka in the case of Bharat Fritz Werner Ltd., where it was held that the place of removal is the buyer's premises. Based on this precedent, the Tribunal ruled in favor of the appellant, stating that until the goods reach the buyer's place, the ownership remains with the appellant, allowing them to take cenvat credit on service tax paid for outward transportation under 'goods transport agency service.'

6. Consequently, the Tribunal found no merit in the impugned order and set it aside, allowing the appeal with any consequential relief. The decision was pronounced in open court.

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