TaxTMI 
TaxTMI 
2026 (5) TMI 506
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....ng under chapter 85 of the Central Excise Tariff. The respondent cleared goods on ex-factory basis as well as on FOR destination basis and also through depots. In respect of FOR sales, the respondent included freight and insurance charges in the transaction value and discharged Central Excise Duty on such value. The respondent also paid Service Tax under Reverse Charge Mechanism on GTA Services used for transportation of goods and availed CENVAT Credit thereof. 3. The Department denied credit on outward transportation on the ground that the place of removal was the factory gate and that transportation beyond the factory gate was not eligible for CENVAT Credit. The Learned Commissioner (Appeals), however, held that where the sale was on FOR destination basis, the freight was part of the assessable value, risk in transit remained with the respondent till delivery, and the sale was completed at the buyers premises. Accordingly, credit on outward transportation was allowed. Hence, the revenue is in appeal. 4. The revenue contends that the factory gate is the place of removal and that outward freight beyond the factory gate cannot be treated as input service after the amendment in....
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.... purpose of CENVAT Credit, that the place of removal was only the factory gate. Such an approach would amount to adopting inconsistent positions: one for valuation and another for credit. The law does not permit such artificial splitting of the same transaction. 10. The Learned Commissioner (Appeals), has rightly observed that if the Department was of the view that the factory gate alone was the place of removal, then should have reopened or reassessed the assessable value and excluded freight from the transaction value. Having accepted duty on the value inclusive of freight, denial of credit on Service Tax paid on GTA Service used for such transportation is not legally sustainable. 11. The reliance placed by the revenue on Ultra Tech Cement Ltd., supra, does not advance its case. The Hon'ble Supreme Court in that case considered the general scope of outward transportation after amendment to Rule 2(l) of the CENVAT Credit Rules. However, the said decision does not laid down that in every case and irrespective of the contractual terms, the factory gate alone must be treated as the place of removal. Therefore, where, the facts establish FOR destination sale, retention of owners....
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.... "6. The core issue to be decided is whether in this case the sale is on ex-works basis or at buyer's premises. Various arguments have been put forth by the learned Advocate including commercial understanding and confirmed ex-works price and payment of VAT to prove that the title in the goods has been transferred at the factory gate itself. However, we find from the factual matrix that the appellant has included both freight and insurance in the ex-works price for the purpose of discharging their VAT liability. On going through various clauses, it is obvious that though there is a separate ex-works price, which has been termed as fixed price and freight separately, a holistic perusal of all this terms and conditions would clearly indicate that the goods are accepted only when they reach the destination in good condition and liability for their transport including pre- payment of transport is on the appellants themselves. Therefore, in the factual matrix it is obvious that sale has got concluded only at the destination of the buyer and not at the factory gate. We also note that while the appellant has placed reliance on the judgment of Ispat Industries Ltd (supra), the ....
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....Tribunal, inter alia, examined the issue of eligibility of Cenvat credit of Goods Transport Agency services on outward transportation. After going through catena of judgments including Hon'ble Supreme Court's judgment in the case of Roofit Industries (supra) and Emco Ltd (supra) as well as Ispat Industries (supra), it was held that wherever the clearance of goods is against FOR contract basis, the authority needs to ascertain the place of removal by applying the judgment of Hon'ble Supreme Court in the case of Roofit Industries (supra) and Emco Ltd (supra). In the case of M/s HD Wires Pvt Ltd Vs CCGST & CE, Indore [Final Order No.57985/2024 dt.08.08.2024], the Coordinate Bench at Delhi, inter alia, examined the applicability of judgment of Roofit Industries and Emco Ltd (supra) in a similar factual matrix where the appellant had not included the freight charges in the transaction value. The Tribunal also relied on the judgment of Hon'ble Supreme Court in the case of CCE & ST Vs Ultra Tech Cement [2018 (9) GSTL 337 (SC)], to come to the conclusion that in the given set of facts, point of sale was where the ownership of goods was transferred to the buyer or customer a....