2026-VIL-1438-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Cenvat Credit on Outward Freight Charges for clearance of final products - Whether outward freight charges for clearance of final products from place of removal qualify as input service under Rule 2(l) of CENVAT Credit Rules, 2004 and whether manufacturer is entitled to take CENVAT credit on such services - HELD – The Rule 2(l)(ii) of CENVAT Credit Rules, 2004 till 31.03.2008 expressly permitted CENVAT credit for services used for clearance of final products from place of removal and outward transportation was specifically included in the definition as abundant caution to avoid disputes. The Larger Bench decision in ABB Ltd v. Commissioner of Central Excise and Service Tax has conclusively held that services availed by manufacturer for outward transportation of final products from place of removal should be treated as input service enabling manufacturer to take credit of service tax paid on such services - Where factory is the place of removal, freight from factory to customer's premises would be covered by the expression in relation to clearance from place of removal. The non-inclusion of transportation costs in assessable value is no ground to deny CENVAT credit – The appellant is entitled to CENVAT credit of service tax paid on outward freight charges – The impugned order is set aside and the appeal is allowed - Limitation Period - Whether entire demand relating to period before 31.03.2008 attracts extended period of limitation and whether any suppression of facts attracts application of extended period - HELD - The Rule 2(l) of CENVAT Credit Rules itself allows taking of CENVAT credit for services from place of removal till 31.03.2008 and entire period under consideration is prior to this date. Appellant has provided all details of CENVAT credit taken in ER-1 returns filed with authorities. No suppression of fact or misstatement on part of Appellant has been made out and no mala fide intention to evade duty by taking wrong credit is discernible from facts - The entire subject matter was one of interpretation of CENVAT Credit Rules on which numerous judgments exist establishing the correct position. On such issues of interpretation, extended period cannot be invoked absent any evidence of deliberate concealment or fraudulent intent - Confirmed demand for extended period is legally not sustainable and is set aside on account of time bar.
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