M/S. Bajrang Wire Products India P Ltd vs Commissioner Of Central Excise

[Arising out of Order-In-Appeal No. 60-61(VC)/JPR-I/2013 dated 24.06.2013 passed by Commissioner of Central Excise (Appeals), Jaipur I]

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?

M/s. Bajrang Wire Products India P Ltd. Appellants

Vs.

Commissioner of Central Excise Respondent

& ST, Jaipur I

Appearance:

Shri Bipin Garg, Advocate for the Appellants

Shri G R Singh, AR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 22.1.2015

FINAL ORDER NOS. A/ 50251-5-252 /2015-Ex(SM)

Per Ashok Jindal :

The appellants are in appeal against the impugned orders wherein input Cenvat credit on outward transportation services was denied to them by the adjudicating authority. A Show cause notice dated 27.3.2012 was issued to the appellant for the period November 2009 to March, 2010 and another show cause notice date 2.4.2012 for the period March, 2011 were issued to the appellant denying input Cenvat credit on outward transportation services on the premise that although the goods are sold by the appellants on FOR basis but in the invoice, freight is shown separately. Therefore, they are not entitled to avail Cenvat credit as per CBEC circular No. 97/8/07 dated 23.8.07. Therefore, impugned proceedings were initiated for the earlier period and demand was confirmed along with interest and equivalent amount of penalty was imposed. For the subsequent show cause notice, demand was confirmed along with interest and penalty of Rs.50,000/- was imposed on the appellant. Aggrieved from the said orders, appellant is before me.

2. Shri Bipin Garg, advocate, learned Counsel for the appellants appears and submits that the appellant is selling goods to their customers on FOR basis and for freight charges no duty is payable by them. Therefore, they have shown freight separately. He further submits that as they have paid the Service tax on freight amount, they are entitled to take Cenvat credit on freight charges as goods are to be delivered at the door of buyers.

3. On the other hand, learned AR opposed the contention of the learned Counsel and submits that as these freight charges are not included in the assessable value of the goods, therefore, they are not entitled to take Cenvat credit of service tax paid on outward transportation services although the goods are delivered on FOR basis as per CBEC circular No. 97/8/07 dated 23.8.07

4. Heard both sides. Considered the submissions.

5. Considering the fact that in the case of Ambuja Cement Eastern reported as [2010-TIOL-309HC-Chhattisgarh-CX). the Honble High Court held that if the goods are sold on FOR basis, and if the freight is not included in the assessable value and the assessee has not complied with the condition of the CBEC circular No. 97/8/07 dated 23.8.07, the assessee is not entitled to take Cenvat credit on outward transportation service. Therefore, I hold that in this case, appellants are not entitled to take Cenvat credit on outward transportation service as same is not included in the assessable value of the goods in compliance with the CBEC Circular No. 97/8/07 dated 23.8.07.

6. I further find that during the course of arguments, learned advocate for the appellants submits that show cause notice dated 27.3.2012 has been issued by invoking extended period of limitation. As there is no suppression on the part of the appellants, therefore extended period of limitation is not invokable. On this account, I find that availment of Cenvat credit came in the knowledge of department during the course of audit. If Audit would not have been conducted, the availment of inadmissible credit would not be known to the department. In these circumstances, I hold that extended period of limitation is rightly invoked. Therefore, I do not find any merit in the appeals. Accordingly, the same are dismissed.

(dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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