The CESTAT, Delhi bench has held that the place of removal for the purpose of availaingcenvatcrediot on outward transport is the premises of the buyer under the amended provision in Rule 2(l) of the Cenvat Rules.
The appellant, M/s Shree Rajasthan Syntex Ltd, have taken cenvat credit of service tax Rs.1,60,152/- on outward freight during the period 01.04.2008 to March, 2009. However, the department denied the credit.
On appeal, the Commissioner (Appeals) held that service tax paid on transportation of finished goods from the factory to the premises ofthe customer could be taken as cenvat credit and accordingly allowed this amount. However, for the period from 01.04.2008 to 31.03.2009, the first appellate authority held that in view of the amendment in the definition of input service w.e.f. 01.04.2008, the Commissioner (Appeals) refers to the ruling of the Supreme Court in the case of CST vs. Ultratech Cement Ltd, the appellant is not entitled to cenvat credit for the period April 2008 to March 2009.
The appellant contended before the Tribunal that the sales are made on FoR destination basis. This fact is also certified by the Chartered Accountant stating that the appellant has sold their goods on FoR destination basis, i.e. freight was paid by the appellant to the transporter till the place of delivery of goods, and property in goods was transferred to the buyer at the destination. Thus, the place of removal is the ‘premises of the buyer’ and not the factory gate. It is further urged that under the facts and circumstances the place of removal is premises of the buyer.
Mr. Anil Choudhary, Judicial Member found that in the facts and circumstances, the appellant have admittedly made sales on FoR destination basis.
“Further, it is the appellant who have borne the incidence of freight and has paid the service tax on the same. I further hold that the place of removal is the premises of the buyer, and accordingly in terms of the amended provision in Rule 2(l), the appellant is entitled to cenvat credit on outward transport under dispute, the same has been incurred upto the place of removal,” the Tribunal said.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
