In Commissioner, CCEST, Bilaspur v. M/s Ultratech Cement Pvt Ltd, a division bench of the Chhattisgarh High Court held that the place of removal is delivery point and not the ‘factory gate’ of the assessee when freight charges are arranged and paid by assessee and the same is integral part of price.
In the instant case, Assesse, a manufacturer of cement, sold cement to certain customers at the premises of the latter. Revenue denied credit to the assesse on the ground that the place of removal is factory gate and buyer’s place cannot be considered as the place of removal in view of Section 4(3)(c) of Central Excise Act as per the Apex Court ruling in CCE, Nagpur v Ispat Industries. The Revenue took a stand that the decision is equally applicable to CCR, 2004 by virtue of Rule 2(t) and (ii) after amendment in Rule 2(l) of CCR, 2004, credit is available only “up to place of removal”.
During the course of proceedings, assessee maintained that as per the purchase order, supply of cement has to be made at the premises of the customer i.e delivery at the premises is a condition to conclude the sale of goods. It further argued that freight is arranged and paid by assessee and the charge is integral part of price of the goods. Thus, place of removal will be place of delivery and not factory gate.
On second appeal, the Tribunal, allowed the contentions of the assesse.
Upholding the Tribunal order, a bench comprising Chief Justice Thottathil B Radhakrishnan and Justice Sharad Kumar Gupta dismissed the departmental appeal and held that, the place of removal of the goods cannot be treated as the factory gate of the Assessee but the delivery point which is the door or premises of the customer.
Read the full text of the Order below.
