The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that Cenvat Credit in respect of service tax is paid on outward transportation under reverse charge mechanism.
The bench of Ramesh Nair (Judicial Member) and C L Mahar (Technical Member) has observed that the sale of excisable goods is on FOR basis and in respect of supply of such excisable goods the appellant have availed the service of transportation on which the appellant have paid the service tax which has been availed as Cenvat Credit.
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Background
The issue raised was whether the appellant are entitled for Cenvat Credit in respect of service tax paid on outward transportation under reverse charge mechanism in the admitted fact that the sale of excisable goods is on FOR basis.
The appellant contended that in the identical set of facts and the question of law involved this Tribunal in the case of Ultra Tech Cement Ltd allowed the Cenvat Credit in the case where the sale is on FOR basis and the Tribunal’s judgement has been upheld by the High Court of Gujarat.
Conclusion
The court noted that in the case of sale of goods on FOR basis, when the freight is integral part of the assessable value on which excise duty was paid, it was held that in this condition the assessee is eligible for the Cenvat Credit on outward transportation.
The tribunal held that the appellant is eligible for Cenvat Credit on outward GTA service.
Read More: No Service Tax On Reverse Charge Basis Applicable To Salary Paid To Directors: CESTAT
Case Details
Case Title: Ambuja Cement Limited Versus Commissioner of C.E. & S.T.-Surat-i
Case No.: Excise Appeal No. 11651 of 2019 – DB
Date: 14.11.2024
Counsel For Appellant: Jigar Shah
Counsel For Respondent: Mihir G Rayka
