The Customs, Excise, Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench refused to grant Cenvat credit of Service Tax paid on Outward Transportation Service for clearance of Excisable Goods to Inox India.
The appellant, Inox India Pvt Ltd raised the sale invoice in respect of the sale of goods wherein after calculating the excise duty on the assessable value an amount of Rs. 45000/- was added and recovered from the buyer of the goods. On this freight, the service tax was paid and the same was claimed as Cenvat Credit which is not in dispute in the present case.
Mr. Dhaval K. Shah, Learned Counsel appearing on behalf of the appellant submits that the freight is included in the invoice value of the goods and the sale is on FOR basis therefore, the service tax paid on such transportation charges is admissible for Cenvat Credit. He referred to the sale invoice, contract with the buyers, and CA Certificates.
The Coram of Ramesh Nair while refusing the cenvat credit to the appellant clarified that the freight is not included in the assessable value however, the same was separately charged to the customers. This is a very important aspect to decide the admissibility of the credit.
“I find that there is no dispute that the appellant is availing the Cenvat credit and declaring in their monthly returns. The issue involved is also the interpretation of Cenvat Credit Rules and on this issue, there are a number of cases made out by the department. In these circumstances, it cannot be said that the appellant had a mala fide intention to evade the excise duty by taking the wrong credit. I do not find any suppression of fact or misstatement on the part of the appellant. Therefore, the demand for the extended period, if any, in this case, will not sustain,” the Tribunal said.Subscribe Taxscan AdFree to view the Judgment