Commissioner Of Central Excise vs M/S. Century Cement

[Arising out of Order-In-Appeal No. 62/RPR-I/ 2013 dated 06/03/2013 passed by Commissioner of Central Excise (Appeals I ), Raipur (CG)]

For approval and signature:

Honble Mr Ashok Jindal, 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?

Commissioner of Central Excise Appellants

& Customs, Raipur

Vs.

M/s. Century Cement Respondent

Appearance:

Shri R K Grover, AR for the Appellants

Shri Sanjay Grover, Advocate for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 01.09.2015

ORDER NO. FO/52732 /2015-Ex (SM)

Per Ashok Jindal :

Revenue is in appeal against the impugned order wherein the Commissioner (Appeals) has allowed input service credit on outward transportation service by examining the documents placed before him.

2. The contention of the Revenue is that respondent is not entitled to take cenvat credit on outward transportation service as they have delivered goods at their depot and are not entitled to avail cenvat credit on services availed beyond the place of removal.

3. Heard the parties. Considered the submissions.

4. I have gone through the impugned order. In the impugned order, learned Commissioner has examined the issue in the light of CBEC Circular 97/8/2007 ST dated 23.8.07 and thereafter made the following observations:

6.1 The term Outward transportation up to place of removal has been discussed under CBEC Circular, No. 97/8/2007-ST dated 23.8.07, wherein it has been clarified that, there may be the situation where the manufacturer/ consignor may claim that the sale has taken place at the destination point because in terms of the sale contract / agreement (i) the ownership of goods and the property in the goods remained with the seller of the goods till the delivery of the goods in acceptable condition to the purchaser at his door step; (ii) the seller bore the risk of loss of or damage to the goods during transit to the destination; and (iii) the freight charges were an integral part of the price of goods. The circular clarifies that, in such case, the credit of the service tax paid on the transportation up to such place of sale would be admissible if it can be established by the claimant of such credit that the sale and the transfer of property in goods (in terms of the definition as under Section 2 of the Central Excise Act, 1944 as also in terms of the provisions under the Sale of Goods Act, 1930) occurred at the such place.

7. In the present case, the Appellant has submitted that as per the terms, of the contract / agreement/ purchase order with the buyer the price is inclusive of freight i.e. F.O.R. destination and no other amount on account of freight has been charged by them from the buyer. They have also submitted that, whatever amount they have also charged from the buyer, excise duty has been paid on the same. They have also submitted that as per the delivery terms in the purchase order, the risk to the material during transit is also on their part. In this regard the appellant also produced Xerox copies of the purchase orders of the party F.O.R. delivery basis. Assignment of job for transportation of Cement, Bill of the Transporter and Consignment Note.

7.1 On going through the above said documents, I find that the documents, produced by the Appellant are in agreement with their above contention. Thus, I find in the instant case, the criterion for availment of cenvat credit on outward transportation as stipulated in the above cited boards circular i.e. (i) the ownership and the property remained with the seller of the goods till its delivery in acceptable condition to the purchaser at his door step; (ii) the seller bore the risk of loss of or damage to the goods during transit to the destination; and (iii) the freight charges were an integral part of the price of goods, is fulfilled. Therefore, I find that in the instant case, the appellant has correctly availed cenvat credit of the service tax paid on the outward transportation and therefore same is liable to allowed. Held accordingly.

7.2 The Honble High Court of Punjab and Haryana has held in Ambuja Cements Ltd. vs. Union of India & others, reported in 2009 P&H-ST (2009 (236) ELT 431 (P&H)]  Service tax credit in respect of transportation where the transportation cost has been included in the value of the excisable goods and not otherwise. In the instant case the transportation paid is on FOR destination and cost of the transportation has been included in the assessable value, therefore, the credit taken by the appellant is admissible.

5. As the learned Commissioner (Appeals) has examined the issue and the goods have been sold by the respondent at the place of buyer i.e. on FOR destination basis. In that view, the place of removal is the place of buyers premises. Therefore, I do not find any infirmity in the impugned order. Same is upheld.

6. Appeal filed by the revenue is dismissed.

(Dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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