The Chandigarh bench of the Customs, Excise and Services Tax Appellate Tribunal (CESTAT) has held that Cenvat credit is allowable for courier service since the buyer has not taken delivery of the goods.
The tax department denied CENVAT credit on Courier service on the ground that the appellant is selling goods at their factory gate. The appellant claimed that they are sending the goods through courier and till the goods reach to the buyer’s place, the appellant is the owner of the goods. In case, the buyer refused to take the delivery of the goods, the goods were returned by courier to them. In such a circumstance, it was claimed that till the delivery of the goods to the buyer, they are the owner of the goods; therefore, in view of the CBCE Circular No. 10654/4/2018 dt. 08.06.2018, they are entitled to avail the Cenvat credit.
The Tribunal observed that as per by the version of Ld. A.R. if the goods are delivered at the buyer’s place, C.S.T. is not required to be charged.
“This is not the mandate of law. In fact, for any interstate sale, C.S.T. is required to be charged by any seller of the goods. By charging C.S.T. does not make the goods are sold at the factory gate. In fact, we have to see that in terms of the CBCE Circular No. 10654/4/2018 dt. 08.06.2018, what is the place of removal. In this case, the goods were sold through courier and till the goods are delivered to the buyer, the appellant is the owner of the goods, as in the case, buyers refuse to take the delivery of the goods, it is the duty of the courier to return back the goods to the appellant. In that circumstance, I hold that the goods have been delivered by the appellant at the buyer’s place and the place of the buyer is the place of removal in facts and circumstances of the case. Therefore, I hold that the appellant is entitled to avail the Cenvat credit on courier service. Therefore, I do not find any merit in the impugned orders, the same is set aside.”
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