C.C.E. Delhi-Iii vs M/S Asian Color Coated Ispat Ltd

[Arising out of Order-In-Appeal No. 565/SVS/GGN/2013 dated: 23.10.2013 passed by Commissioner (Appeals)  Delhi-III]

For approval and signature:

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

C.C.E. Delhi-III ...Appellant

Vs.

M/s Asian Color Coated Ispat Ltd. Respondent

Appearance:

Mr. R K Mishra, DR for the Appellant

Mr. R C Chowdhary, Advocate for the Respondent

CORAM:

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

Date of Hearing. 03.06.2015

FINAL ORDER NO. 53079 /2015

Per S. K. Mohanty:

The Revenue is in appeal before this Tribunal against the impugned order dated 23.10.2013 passed by the Commissioner (Appeals) Central Excise, Gurgaon, wherein cenvat credit of service tax paid on the freight charges for transportation of goods up to the buyers premises has been allowed in favour of the respondent. The impugned order has been challenged by Revenue on the ground that the transportation service has not been used either directly or indirectly in or in relation to manufacture of assesses final product and thus, the said service has no nexus with the manufacturing of the final product by the assessee.

2. I have heard the Ld. Counsel for both the sides and perused the records.

3. It is an admitted fact that supply of the finished goods by the Respondent to its buyers was on FOR destination basis and the price agreed upon between the parties include the freight and insurance charges, which were recovered by the Respondent from its buyers during the disputed period. I find from the available records that the goods have been delivered at the buyers premises and the transit insurance/ freight charges have been borne by the Respondent.

4. The definition of Input Service contained in Rule 2L of the Cenvat Credit Rules, 2004 takes within its ambit clearance of final product up to the place of removal. In the present case, the facts are not in dispute that the ownership of the goods and the title in the goods remained with the respondent till delivery of the goods in acceptable condition to the purchaser at his door step; that the Respondent bore the risk of loss or damage to the goods during transit to the destination; and that the freight charges were an integral part of the price of the goods. The term place of removal has been defined in section 4(3)(c) of the Central Excise Act, 1944, which also includes any other place of removal where the excisable goods are to be sold after their clearance from the factory. In the present case, since the title or ownership of goods passed on to the buyer at their site, such site of the buyer will be considered as the place of removal and as per the definition of input service, the freight payable for such transportation of goods will be considered as input service for the purpose of taking cenvat credit.

5. Upon proper analysis of the statutory provisions, the impugner order has allowed the cenvat benefit in favour of the respondent herein. The grounds raised by the Revenue appellant in this appeal have no legal sanctity because, nexus with regard to transportation of goods in case of FOR sale, has been specifically considered input contained in Rule 2(l) or the Cenvat Credit Rules, 2004.

6. In view of above there is no infirmity in the impugned order and as such, the appeal filed by the Revenue appellant is dismissed.

(Dictated and pronounced in open court)

(S.K. Mohanty)

Member(Judicial)

Neha