2026-VIL-283-CESTAT-MUM-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Availment of CENVAT credit on GTA services for goods sold on FOR destination basis - Department disputed the availment of CENVAT credit on the ground that as per the definition of 'input service' under the CENVAT Credit Rules, 2004, the place of removal should be confined to the factory gate and any expenses incurred thereafter should not be considered as input service - Whether the appellant is eligible to avail CENVAT credit on the service tax paid for GTA services for the transportation of goods from the factory to the customer's premises, where the sale is made on FOR destination basis – HELD - The learned Commissioner has denied the benefit of CENVAT Credit on the sole ground that copy of the transit insurance policy documents for delivery of the goods at the buyers’ premises, were not submitted by the appellants - Since sale of goods were on FOR basis, obtaining the transit insurance is secondary and it is up to the sender of the goods to decide whether to claim the benefit of any damage/ destruction, pilferage from the insurance company or to borne the same by themselves. Thus, it is not the essential criteria that the FOR destination can be ascertained, only when the goods are insured and not otherwise. In the case in hand, since the ownership/title of the goods were transferred by the appellants at the site of the buyers, case should qualify for consideration as ‘input service’ as per the provisions contained in Rule 2(l) of the Rules of 2004 - The Tribunal Larger Bench in the case of Ramco Cement v. CCE held that where the goods are sold on FOR destination basis and the ownership of the goods gets transferred at the customer's premises, the place of removal shifts to the buyer's premises. The appellant is entitled to the CENVAT credit of the service tax paid on the GTA services availed for the transportation of goods to the buyer's premises, as the place of removal shifted to the buyer's premises due to the FOR destination sale - The appeals are allowed
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