By Puloma Dalal, Jayesh Gogri, Chartered Accountants
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Whether CENVAT credit of service tax paid on GTA services is available where the appellant has entered into Free on Road (FOR) contract with the customers?
Facts: The appellant was engaged in the manufacture of nuts and bolts, wire equipment etc. and entered into an FOR contract with their customers. As such, the transportation of the said goods being the responsibility of the appellant, they paid service tax under GTA and claimed CENVAT on the same. The Revenue contended that with the amendment in the definition of input services with effect from 01-04-2008 the appellant was not entitled to avail the credit.
The appellant contended that their sales were on FOR basis and, as such, place of removal gets extended to the buyer’s premises. They produced on record the purchase order as also the invoices along with a Chartered Accountant’s certificate in support of their claim and relied upon Ambuja Cements Ltd. vs. Union of India reported at [2009 (236) ELT 431 (P & H)] where the Board’s Circular of 2007 was examined and it was held that they were entitled to the benefit of CENVAT credit of service tax paid on the GTA services.
Held:
There was no justifiable reason to uphold the finding of the lower authorities where the Chartered Accountant’s certificate stated to the effect that sale was on FOR basis and all the expenses incurred up to the buyer’s premises formed part of the cost of final product. Further, the appellant were the owners of the goods up to the place of delivery i.e. the buyers’ premises and as such the GTA services so availed by them, were to be treated as input service and, thus, they were entitled to the credit.
