2020 (1) TMI 1716 - AT - Central Excise

Appellant Wins Cenvat Credit for Railway Freight via SAIL as Pure Agent under Cenvat Credit Rule, 2004.

The CESTAT New Delhi allowed the appellant's appeal, finding that the appellant was entitled to cenvat credit on service tax for railway freight paid ... CENVAT Credit - input services - railway freight paid to Steel Authority of India Ltd. - contravention of Rule 3 read with Rule 9 of Cenvat Credit Rule, 2004 - HELD THAT:- In the facts and circumstances, the transfer of the property in the goods is effective from the moment the goods are loaded on rail by SAIL. Further, SAIL have paid the freight alongwith service tax on behalf of the buyer – appellant, and further paid such freight and service tax is separately shown in the invoice. Thus, SAIL has acted as a pure agent of the appellant by paying freight alongwith service tax. Further, there is no dispute as regards purchase and receipt of the inputs in the factory of the appellant. Further, there is no dispute of the appellant having paid to SAIL the full amount towards value of the goods alongwith freight and service tax thereon. The appellant is entitled to cenvat credit on the input service being ‘railway freight’ - the impugned order is set aside - appeal allowed. The Appellate Tribunal, CESTAT New Delhi, heard a case where the appellant had taken cenvat credit on service tax for railway freight paid to Steel Authority of India Ltd. The Revenue contended that the credit was taken in contravention of Cenvat Credit Rule, 2004. However, the Tribunal found that SAIL acted as a pure agent of the appellant in paying the freight and service tax, entitling the appellant to the cenvat credit. The appeal was allowed, and the previous decision was set aside, granting the appellant consequential benefits.