Cenvat Credit : In case of sale at the place of destination (FOR basis), an assessee is only entitled to claim cenvat credit on service tax paid for the Goods Transportation Agency service provided amount paid was integral part of the price of the goods
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[2014] 51 taxmann.com 31 (Chhattisgarh)
HIGH COURT OF CHHATTISGARH
Lafarge India Ltd.
v.
Commissioner of Central Excise, Raipur*
YATINDRA SINGH, CJ.
AND PRASHANT KUMAR MISHRA, J.
TAX CASE NO. 34 OF 2011†
MARCH 12, 2014
Section 4 of the Central Excise Act, 1944 - Valuation under Central Excise - Transaction Value - Place of Removal - In section 4(3)(c), place of removal means a depot, premises, or any other place from where the excisable goods are to be sold after their clearance from the factory - Hence, if under terms of contract, sale takes place at destination, then, that place may be place of removal [Paras 18 to 20] [In favour of assessee]
Rule 2(l) , read with Rule 2(t) of the Cenvat Credit Rules, 2004 and section 4 of the Central Excise Act, 1944 - CENVAT Credit - Input Service - Place of Removal - Though section 4(3)(c) defines word 'place of removal' for purpose of that section but in absence of its meaning for other sections, it would be applicable unless it is otherwise provided [Para 18] [In favour of assessee]
Rule 3 , read with Rule 2(k) and 2(l), of the Cenvat Credit Rules, 2004 - CENVAT credit - General - Fundamental principle of cenvat credit is to avoid double taxation - Hence, Cenvat credit may be taken only of those inputs, whose price was added in price of goods or was included towards price of goods and not otherwise [Para 21] [In favour of revenue]
Rule 2(l) , read with Rule 2(t) of the Cenvat Credit Rules, 2004, Rule 5 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 and section 4(3)(c) of the Central Excise Act, 1944 - CENVAT Credit - Input Service - Rent-a-cab/Transportation Services - Period from January 2005 to October, 2007 - Assessee, a manufacturer of cement and clinker, was supplying goods to different entities on freight on road (FOR) basis - Assessee took credit of transportation services - Department denied credit on ground that freight was not an integral part of price of goods - Assessee argued that since ownership was transferred at customer's premises, freight was eligible for credit - HELD : As per Rule 2(t) read with section 4(3)(c) of Central Excise Act, 1944, if under terms of contract, sale takes place at destination, then, that place may be place of removal - However, an assessee is only entitled to claim cenvat credit on service tax paid for Goods Transportation Agency service provided amount paid was integral part of price of goods - Since freight was not included in price of goods, same was not eligible for credit as input service - Credit was not allowable even as per circular No. 97/8/2007-ST dated 23-08-2007, as freight was not an integral part of price [Paras 23 to 30] [In favour of revenue]
Circulars and Notifications : Circular No. 97/8/2007-ST dated 23-08-2007
■■■
[2014] 51 taxmann.com 31 (Chhattisgarh)
HIGH COURT OF CHHATTISGARH
Lafarge India Ltd.
v.
Commissioner of Central Excise, Raipur*
YATINDRA SINGH, CJ.
AND PRASHANT KUMAR MISHRA, J.
TAX CASE NO. 34 OF 2011†
MARCH 12, 2014
Section 4 of the Central Excise Act, 1944 - Valuation under Central Excise - Transaction Value - Place of Removal - In section 4(3)(c), place of removal means a depot, premises, or any other place from where the excisable goods are to be sold after their clearance from the factory - Hence, if under terms of contract, sale takes place at destination, then, that place may be place of removal [Paras 18 to 20] [In favour of assessee]
Rule 2(l) , read with Rule 2(t) of the Cenvat Credit Rules, 2004 and section 4 of the Central Excise Act, 1944 - CENVAT Credit - Input Service - Place of Removal - Though section 4(3)(c) defines word 'place of removal' for purpose of that section but in absence of its meaning for other sections, it would be applicable unless it is otherwise provided [Para 18] [In favour of assessee]
Rule 3 , read with Rule 2(k) and 2(l), of the Cenvat Credit Rules, 2004 - CENVAT credit - General - Fundamental principle of cenvat credit is to avoid double taxation - Hence, Cenvat credit may be taken only of those inputs, whose price was added in price of goods or was included towards price of goods and not otherwise [Para 21] [In favour of revenue]
Rule 2(l) , read with Rule 2(t) of the Cenvat Credit Rules, 2004, Rule 5 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 and section 4(3)(c) of the Central Excise Act, 1944 - CENVAT Credit - Input Service - Rent-a-cab/Transportation Services - Period from January 2005 to October, 2007 - Assessee, a manufacturer of cement and clinker, was supplying goods to different entities on freight on road (FOR) basis - Assessee took credit of transportation services - Department denied credit on ground that freight was not an integral part of price of goods - Assessee argued that since ownership was transferred at customer's premises, freight was eligible for credit - HELD : As per Rule 2(t) read with section 4(3)(c) of Central Excise Act, 1944, if under terms of contract, sale takes place at destination, then, that place may be place of removal - However, an assessee is only entitled to claim cenvat credit on service tax paid for Goods Transportation Agency service provided amount paid was integral part of price of goods - Since freight was not included in price of goods, same was not eligible for credit as input service - Credit was not allowable even as per circular No. 97/8/2007-ST dated 23-08-2007, as freight was not an integral part of price [Paras 23 to 30] [In favour of revenue]
Circulars and Notifications : Circular No. 97/8/2007-ST dated 23-08-2007
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