2026-VIL-88-CESTAT-CHE-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Rule 2(l) of CENVAT Credit Rules, 2004 – Recovery of credit – Appellant is engaged in manufacture of cement – Appellant availed CENVAT credit of service tax paid under reverse charge on GTA services used for outward transportation of cement from factory/depots to buyers’ premises – Department issued show cause notice proposing recovery of credit on ground that outward transportation beyond place of removal did not qualify as input service under Rule 2(l) of the Rules – Commissioner confirmed recovery of credit along with interest and penalty – Whether GTA services used for outward transportation are eligible for CENVAT credit – HELD – Eligibility of CENVAT credit on GTA services for outward transportation is inseparably linked to determination of “place of removal”. Determination of place of removal is a fact based exercise and cannot be mechanically fixed at factory gate. In cases where sales are established to be on FOR destination basis and ownership and risk pass only upon delivery, buyer’s premises constitute the place of removal. Impugned Order-in-Original having been passed without undertaking the mandatory factual examination is unsustainable in law and hence, it is set aside. Matter is remanded to Adjudicating authority for limited purpose of examining sale contracts, purchase orders, invoices, transport documents and allied records to determine either disputed clearances were effected on FOR destination basis and either buyer’s premises constitute place of removal. Upon such verification, Adjudicating authority shall re-determine the admissibility of CENVAT credit on GTA services – Appeal allowed
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