M/S. Bhushan Steel Ltd vs C.C.E. & S.T. Ghaziabad

[Arising out of Order-in-Appeal No. 33-Comm/Gzb/2013 dated 28.02.2013 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Ghaziabad].

For approval and signature:

Honble Shri 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. Bhushan Steel Ltd. .Appellants

Vs.

C.C.E. & S.T. Ghaziabad .Respondent

Appearance:

Shri Rajesh Chibber, Advocate for the Appellants

Shri V.P. Batra, DR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing: 13.02.2015

FINAL ORDER NO. 50396/2015-EX(SM)

Per Ashok Jindal:

The appellant is in appeal against the impugned order wherein input services credit on outward transportation of goods have been denied to the appellant.

2. The facts of the case are that appellant is manufacturer of Steel Billets, Precision Tubes, Wire Rods & wire rounds. In some cases appellant is clearing goods from there factory gate. In some case the goods are cleared from depots and some cases goods are sold on FOR basis to their customers. When the goods are cleared through factory gate there is no dispute. The goods which are cleared from the depot revenue is of the view that appellant as paid duty on the value of goods at their factory gate and have not included the transportation from factory to the depot same is required to be paid duty on transportation charges from factory gate to the depot. Therefore, the freight from factory to the depot is includable in the selling price at factory gate and they are required to pay duty as appellant has not paid duty thereon. Therefore, they are not entitled to claim Cenvat Credit on transportation charges from factory gate to depot. In the cases where appellant is clearing goods on FOR basis to their customers the contention of the revenue is that as place of removal is factory gate therefore transportation charges beyond factory gate they are not entitled to take Cenvat Credit as ownership of the good is with the buyer. In these circumstances, Cenvat Credit on outward transportation services from factory to depot / from factory to customers place was denied. Consequently, duty was demanded along with interest and penalty is imposed on the appellant. Aggrieved from the said order appellant is before me.

3. The ld. Counsel for the appellant submits that where they are selling goods from depot the place is factory gate and from the depot are the same. Therefore they are not required to discharge duty on freight charges as same has already been included in the assessable value. Consequently, whatever services tax they have paid on transportation of goods from factory to depot they are entitled to claim Cenvat Credit as place of removal is depot. He further submits that they are not recovering any transportation charges from the customers towards transportation from factory to depot. Therefore they are entitled to take Cenvat Credit.

4. For transportation of goods from factory to the customers places it is the contention of the ld. Counsel they are complying with the condition of the CBEC circular no.97/8 /2007 dated 23.08.2007 as the transportation charges is included in the assessable value and ownership and risk of goods lies with the appellant. Therefore, they are entitled to claim Cenvat Credit on outward transportation services.

5. On the other hand Ld. AR opposes the contention of the Ld. Counsel and submits that the appellant is clearing goods from their factory gate to certain place and thereafter they are paying transportation charges of the goods upto the depot. These transportation charges are required to be included in the assessable value of the goods and same has not been added in the assessable value of the goods and therefore they are not entitled to take Cenvat Credit on transportation charges paid by them upto the place of depot. He further submits that appellant has failed to discharge their onus as the ownership and risk of the goods remains with them in case goods are sold on FOR basis, therefore they are not entitled to claim Cenvat Credit on the outward transportation charges.

6. Heard the parties. Considered the submissions.

7. It is the contention of the Ld. Counsel that they are not charging any freight towards freight charges from the customers when the goods are cleared from the depot. This fact is to be examined by the Adjudicating Authority. If the selling price of the goods from factory and from depot are same, in that case appellant is entitled to claim Cenvat Credit on outward transportation charges paid by them from their factory to the depot, otherwise not. This fact can be ascertained by the adjudicating authority by going through the records of the appellant.

8. With regard to the goods sold on FOR basis as transportation charges have been included in the assessable value of the goods and goods are delivered on the door of the buyer. Therefore the ownership of the goods remains with the appellant. In these circumstances appellant has complied with the condition of the CBEC circular no. 97/8/2007 dated 23/8/2007. Therefore, I hold that on transportation charges where the goods are sold on FOR basis appellant is entitled to claim Cenvat Credit on outward transportation.

9. As discussed above the fact is to be examined whether the price at factory gate to depot are same or not and whether the appellant has charged towards freight from their customers toward transportation of goods from factory to depot.

10. In these circumstances, I remand matter back to the Adjudicating Authority for verification purpose and after verification the Adjudicating Authority shall ascertain the liability of the appellant as discussed here in above. With these terms appeal is disposed off.

(Dictated and pronounced in the open court)

(Ashok Jindal) Member (Judicial)

Bhanu

5

E/56836/2013-EX(SM)