The Appellant is entitled to Cenvat Credit on outward freight charges as they bore the costs until delivery, distinguishing the case from prior Supreme Court rulings.

A/10373/2019 dated 25.02.2019, the Bench allowed the Appeal. In view of the above submissions, the Learned Counsel prays that the present Appeal may be allowed.

5. The Learned AR reiterates the findings of the lower authorities. He relies on the case law of CCE & ST Vs. Ultra Tech Cement Ltd.-2018 (9) G.S.T.L. 337 (S.C.), wherein the Hon’ble Supreme Court has held that the Cenvat Credit can be taken for the input services used only on “up to the place of removal”. Accordingly, he submits that the present Appeal is liable to be dismissed.

6. The Appellant has submitted the Chartered Accountant’s Certificate dated 12th April 2024 to the effect that invoices are made on FOR basis and the freight is being borne by the Appellant and is not charged on the buyer.

It also certifies that the goods cleared to the distributor are in terms of Section 4A of CEA, 1944, wherein the responsibility to deliver the goods till doorstep of the customers is that of the Appellant.

7. Heard both sides and perused the Appeal Papers, written submissions and case law cited.

8. In this case, the Department has proceeded on the ground that the input services (outward freight charges) have been used “ subsequent to the place of removal”. Accordingly, relying on the amended Rule 2(l) of the Cenvat Credit Rules, 2004 the Adjudicating Authority has held that the Appellant would not be eligible for the Cenvat Credit.

9. In the cited decisions of Ahmedabad Tribunal in the case of Ultratech Cement Ltd. and Sanghi Industries Ltd, the Appellants have canvassed the following two points:-

(i) The freight is borne by the Appellant and the Appellant is responsible to deliver the goods upto the doorsteps of the buyer.

Therefore, the Appellant contends that the „place of removal‟ is that of the buyer of the cement.

(ii) As on alternate pleading, they have submitted that the freight charges have not been separately collected by the Appellant from the buyer. Therefore this forms part of the total cost to the company. As the goods are to be assessed in terms of section 4A Valuation, the Excise Duty has been paid even on the freight charges borne by the Appellant. Therefore, even on this count, the Appellant should be eligible to take the Cenvat Credit.

10. The Ahmedabad Bench in the case of Sanghi Industries and Ultratech Cement Ltd., cited supra has gone through the factual details and the Certificate issued by the Chartered Accountant certifying that the Appellant is responsible for delivery of the goods till the doorstep of the buyer. Based on these factual details and relying on the case law of CCE Vs. Roofit Industries Ltd.-2015 (319) ELT 221 (SC), the Hon’ble Bench has held as under:-

5. We find that the Chartered/ Cost Accountant has certified that the goods were sold on FOR basis by the Appellant and the freight/ damages in transit was responsibility of Appellant till the goods reached the doorstep of the Customers. Also we find that the consignment notes were raised upon the Appellant and they did not charge any amount except price of the goods from the customers. Thus in the light of above circular we find that as the ownership of the goods remained with the Appellants till the goods reached to the customer‟s doorstep and the freight charges as well as damage to the goods till destination were borne by the Appellants, hence they are eligible for the credit of service tax paid by them on outward freight.

[Emphasis supplied]

11. The Bench has also considered the aspect of the freight forming part of the total cost and has held as under:-

From the above judgment it is thus clear that till the goods are handed over to the buyer, the cost is borne by the assessee or in other words where the goods are cleared on FOR basis the freight paid on outward transportation would qualify as “Input Service”. As regard reliance placed upon by the revenue on the judgment of the Apex Court in case of Ultratech supra, we find that the Hon‟ble Supreme Court was concerned only with the “place