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CENVAT Credit - Since goods are delivered directly to customers, GTA Service employed up to door of buyer is available as Credit - so also, when goods are cleared from depot, same becomes place of removal and appellant is entitled for Input Service credit on GTA service up to depot: CESTAT

By TIOL News Service

MUMBAI, FEB 08, 2013: THE period involved is February, 2009 to October, 2009 and concerns availment of CENVAT Credit on GTA Service.

The appellant is manufacturer of I.C. Engine Parts and Aluminium Ingots etc. They are clearing the goods directly to the customers from their factory and sale price is FOR. Therefore, they included the transportation charges into the assessable value and claimed input service credit of outward transportation service. On this account, they avail CENVAT credit of Rs, 10,354/-.

The appellant has also cleared the manufactured goods from their depots. As the assessable value on clearance from depot are determined under Section 4A (?) of the Central Excise Act, 1944, the appellant took input service credit of Rs.1,07,352/- on the transportation of the said goods up to Depot as the sale is effected from the Depot.

Revenue is of the view that the appellants are not entitled for input service credit on the goods transportation service beyond their factory as the same is the place of the removal after 01.04.2008 when the amendments were carried out in the CCR, 2004.

Since the lower authorities denied the CENVAT credits availed, the appellant is before the CESTAT and submits that in case of the clearances made from depot, the depot is the place of removal and, therefore, they are entitled for input service credit on GTA service. Insofar as clearances from the factory on FOR basis are concerned, the appellant justified the availment of CENVAT credit by relying on the Board's Circular No. 97/8/2007 dated 23.08.2007.

After hearing both sides, the Bench held -

“6. As regard to the denial of input service credit of Rs. 1,07,352/- I find that the clearances have been made by the appellant from the depot and as per the Section 4A of the Central Excise Act, 1944, the depot is the place of removal as the clearances have been made by the appellant from their depot and the same is place of removal. Therefore, the appellants are entitled for input service credit on GTA service upto the depot.

6.1 With regard to the denial of CENVAT credit of Rs. 10,354/-, I find that as per the Board's Circular No. 97/8/2007 dated 23.08.2007 the appellant is satisfied all the conditions as the sales are upto the place of buyer and the transportation charges have formed a part of the assessable value, the transportation risk has been borne by the appellant. Therefore, the appellant is entitled for input service credit on GTA service upto the place of removal i.e. place of buyer's door. The view is supported by the decision in the case of Palco Metals Ltd. vs. CCE – 2011-TIOL-1990-CESTAT-AHM . Therefore, on the whole, the appellants are entitled for input service credit in the facts of the case.”

In fine, the order was set aside and the appeal was allowed with consequential relief.

(See 2013-TIOL-243-CESTAT-MUM)


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