CENVAT Credit of Service Tax Allowable on charges of Freight for transportation on Gas which is supplied on FOR Destination Basis: CESTAT [Read Order]

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the CENVAT credit of service tax is allowable on the charges of freight for transportation of gas which was supplied on the Freight On Road (FOR) destination basis. 

Gujarat Gas Ltd, the appellant assessee appealed against the order passed by the Commissioner (Appeals) for denying the CENVAT credit of Service Tax paid on the charges of Freight for transportation of Gas from their mother station to the daughter station from where the sale takes place. 

Amber Kumrawat, the counsel for the assessee contended that the sale of gas took place at the daughter station when the mother station had supplied to the buyers and till then they were the owner of the gas and that the gas was supplied on FOR destination basis and in these circumstances they are entitled to CENVAR credit, in terms of Circular No. F/116/23/2018-CX-3. 

Ashok Thanvi, the counsel for the revenue relied on the decisions made by the lower authorities and contended that the assessee was not entitled to get the CENVAT credit of service tax. 

The Bench observed that if the transportation of gas from their mother station to the daughter station from where the sale takes place on a FOR destination basis, the CENVAT credit of service tax was allowable. 

The two-member bench comprising Ramesh Nair (Judicial) and Raju (Technical) held that the adjudicating authority had not verified the fact that whether the transportation of gas was on the FOR destination basis thus quashed the denial of CENVAT credit and directed re-adjudication. 

To Read the full text of the Order CLICK HERE

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