M/S. Hi Tech Gears Ltd vs C.C.E. & S.T. Jaipur-I

[Arising out of Order-In-Appeal No. 189-VC-CE-JPR-I-2013 dated: 19.12.2013 passed by CCE Jaipur-I]

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?

M/s. Hi Tech Gears Ltd. ...Appellant

Vs.

C.C.E. & S.T. Jaipur-I Respondent

Appearance:

Mr. Ram Chander Chaudhary (Advocate) for the Respondent

Mr. Pramod Kumar, DR for the Appellants

CORAM:

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

Date of Hearing.23.06.2015

Final Order No. 53090 /2015_

Per S K Mohanty:

This appeal is directed against the impugned order dated 19.12.2013 passed by the Commissioner of Central Excise (Appeals); Jaipur, wherein cenvat credit of service tax amounting to Rs. 1,64,915/- paid on outward freight by the appellant for transportation of goods beyond the place of removal has been confirmed and penalty of Rs. 15,000/- imposed under Rule 15 of the Cenvat Credit Rules, 2004. The reason for disallowance of the cenvat credit is that service tax on outward freight beyond the place of removal is not eligible for cenvat credit in view of the amendment in the definition of Input service w.e.f 1.4.2008.

2. The Ld. Advocate appearing for the appellant submits that as per the terms of agreement, the freight element is inbuilt in the price and the ownership/ title of the goods passed on at the buyers site. The Ld. Advocate, further submits that since, the outward transportation charges have been borne by the appellant, the service tax paid on such charges should be considered as input service as per the inclusive part contained in the definition of Input Service in Rule 2(l) of the Cenvat Credit Rules.

3. The Ld. Jt. CDR appearing for the Revenue respondent reiterated the findings recorded in the impugned order.

4. Heard the Ld. Counsel for both the sides and perused the records.

5. It is an admitted fact that the ownership/ title of good have been passed on at the customers place and the freight charged for transportation of the finished goods have been incurred by the appellant. Hence in view of the post amended provisions of Rule 2(l) of the Cenvat Credit Rules, 2004, outward transportation up to the place of removal should be considered as input service for the purpose of taking cenvat credit. Therefore, the impugned order denying the cenvat credit to the appellant is not sustainable and accordingly, the same is dismissed and the appeal is allowed in favour of the appellant.

(Dictated and pronounced in open court)

(S. K. Mohanty)

Member(Judicial)

Neha

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